Oliver Koppell

CITY HAUL POLS WANT YOU TO PAY LAW BILLS

New York Post, By DAVID SEIFMAN City Hall Bureau Chief, April 19, 2008

The City Council is examining whether it can provide taxpayer-funded lawyers to individual legislators who might be questioned in the phantom funds mess, The Post has learned.

Councilman Oliver Koppell (D-Bronx) said he suggested that Speaker Christine Quinn develop a policy on legal representation because so many council members aren't sure what to do if they're summoned.

"It's very intimidating to think you might be called by the US attorney or DOI," Koppell said, referring to the city Department of Investigation.

"It's my understanding, if in fact someone is called in to testify and wants to be represented, the council would be providing a separate lawyer."

Quinn's office is studying the issue and drafting a memo that will be distributed to the 50 other council members next week.

An aide said he didn't know what the memo would say or whether the city would actually end up picking up the tab for private attorneys.

Quinn has already hired two taxpayer-funded sets of lawyers, Sullivan & Cromwell, to represent the entire council and Lee Richards III to represent her in dealings with the US attorney and the Department of Investigation.

Sullivan & Cromwell signed a one-year contract last October for about $95,000. Richards will be paid $600 an hour, less than his usual rate, sources said.

Law-enforcement agencies are scrutinizing millions of dollars distributed each year by council members to local community groups, including $17 million that was reserved in fictitious accounts since 2002 so it could be handed out to genuine organizations after the budget was adopted each June.

On Wednesday, Asquith Reid, chief of staff to Councilman Kendall Stewart (D-Brooklyn), and another Stewart aide were indicted for allegedly stealing $145,000 from a nonprofit that Reid led, the Donna Reid Memorial Education Fund.

In another development, The Post has learned that some nonprofit and community groups have received council grants that were then passed through to second groups.

Officials said the longstanding practice was designed to help tiny nonprofit groups that don't have the capacity to file the paperwork needed to get city funding.

But one council member said that also opens the door to potential conflicts of interest.

"If my uncle runs Group B and I don't want to give them money directly, I give it to Group A which gives it Group B," explained the council member.

Under current city rules, no subcontract can exceed $100,000.

Sources said Quinn, for the sake of transparency, might end the entire practice.

"That's an area of reform the speaker is looking at," a source said.

Council staff also have been reminded of a previous directive not to destroy any records related to discretionary funds.

The city and federal investigation of the council is sending jitters through city nonprofit organizations, which receive more than $60 million a year in so-called "member items."

Sources said one some nonprofits have already been notified by the Department of Youth and Community Development to expect delays in this year's funding allotments because of the continuing probes.

"People are on pins and needles," said one council staffer.