Speaker Christine Quinn

Quinn on City Council Slush Fund

Christine Quinn Defends Member Items

Council Aids Indicted for Member Item Rip-Offs
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QUINN: SLUSH FUND HELPED ME
New York Post, By TOM TOPOUSIS, May 12, 2008

Embattled City Council Speaker Christine Quinn has admitted for the first time that she understood that the multimillion-dollar slush fund gave her political advantage.

Quinn, who is likely running for mayor, says she knew that the use of the funds - which are now the subject of federal and city investigations - could be helpful to her.

"Did I think, as a speaker, having the [reserve] money to give out through the year might give me political leverage? Of course, I did," Quinn told New York magazine for its current edition.

Sources have said that Quinn doled out the funds to curry favor with certain council members and special-interest groups.

For a candidate for mayor, the support of key council members across the city could be very useful in building a citywide campaign, experts have said.

Since 1999, about $17 million in council monies have been set aside in phantom organizations that were later given out at the speaker's discretion. Quinn said she recognized that her interest in using the council's discretionary funds for political purposes contradicts her reform agenda and push for "transparency."

"I'm not going to lie to people that I didn't think that. Is that a good reform thing to have thought? No. . . . But that's the truth," Quinn said.

tom.topousis@nypost.com

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Slush Probers Eye Fraud Rap for Quinn
New York Post, April 13, 2008

Slush Probers Eye Fraud Rap for Quinn
By Brad Hamilton, Angela Montefinise and Melissa Klein
New York Post

April 13, 2008 -- Feds probing the City Council budget scandal are weighing wire- and mail-fraud charges against those who helped send millions into a secret slush fund, The Post has learned.

"If you pick up a phone and tell someone to do something illegal, that's wire fraud," said a law-enforcement source familiar with the probe. "If you send a check, that's mail fraud."

Sources said prosecutors are considering several targets, including council Speaker Christine Quinn, though it was unclear whether they had found any evidence against her.

Other council members and staff are also under scrutiny, along with staffers from the council's finance division and the city Office of Management and Budget, sources said.

Mail and wire fraud each carry a maximum $1 million fine and 30 years in prison.

The federal probe is now squarely focused on who was involved in setting up the fake groups used to hide and hold on to funds for later use in the budget cycle.

Sources said the money - more than $17 million over the past six years - was doled out as political favors to groups affiliated with lawmakers who had been loyal to the speaker's agenda. Quinn claims it helped groups that fell through the cracks.

The feds are also looking at who handled the financial transactions.

Mike Keogh, the council's former budget director who was dismissed by Quinn after the practice was uncovered, told The Post only that he was cooperating with the investigation.

Councilman Kendall Stewart (D-Brooklyn) has been subpoenaed but said he was not a target.

Quinn, a presumptive mayoral candidate next year, also denies being a target.

She has reportedly hired a defense attorney, former federal prosecutor Lee Richards III, to help her handle inquiries by agencies probing council funds.

The Manhattan US Attorney's Office began looking into council finances last fall after receiving a tip that staffers were diverting official funds for their personal use, the source said.

Quinn says she spoke to the feds and the city Department of Investigation when she discovered the bogus organizations last fall - at the same time prosecutors were probing financial records of council staffers.

On April 3, The Post broke the news of the secret slush fund and how her office diverted $4.7 million into pet projects by funding 30 phantom organizations since 2007. About a quarter of the fund recipients are headquartered in Quinn's district, which encompasses Chelsea, Greenwich Village and parts of Midtown.

The news sparked the interest of the Manhattan District Attorney's Office, but after a sit-down with the feds two weeks ago, the DA agreed to step back.

Two council members told The Post that crimes had been committed - and several want an independent audit.

"What happened is at the very least fraud," one said. "It's as clear as day. And if more than two people knew about it, it's conspiracy to commit fraud."

"There are some pretty bold lies being told."

Meanwhile, Quinn announced Friday major reforms that would essentially eliminate slush funds from the system.

From now on, community organizations will need to submit detailed requests for a portion of the speaker's discretionary funds, which amount to $21 million to $25 million, Quinn said.

While some legislators criticized the move as weakening the council, others fully supported it.

"This is real reform, and while it does weaken the speaker's position, it will allow the council to focus on other, crucial budget decisions," Councilman David Yassky said. "It will have a major long-term payoff."

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Quinn Probed over Bogus Grant Groups
New York Post, April 3, 2008

This $$ is Hers for the Faking
Quinn Office Probed over Bogus Grant Groups
By Frankie Edozien
New York Post

April 3, 2008 -- City Council Speaker Christine Quinn's office hid millions of taxpayer dollars by allocating grants to phantom organizations as a way of holding the funds to dole out political favors later - bogus bookkeeping that is the subject of city and federal probes, The Post has learned.

Among the dozens of fabricated groups that were slated to receive funds were the "Immigration Improvement Project of New York" ($300,000), the "Coalition for a Strong Special Education" ($400,000) and the "American Association of Concerned Veterans" ($422,763).

The total amount set aside in 2007 and 2008 for the fake organizations - which are each listed by name in the city budget after being inserted at the council's request - was $4.7 million. In the two years, 30 phantom groups were listed, council aides confirmed.

The money, in effect, became a slush fund for the speaker and was later used at Quinn's discretion to reward groups that were loyal to her and to fund favored council members' pet projects, sources told The Post.

The scheme gave "the speaker a stash of cash with which to thank or pay off politically important allies or cooperative council members," a source said.

Quinn insisted in an interview yesterday with The Post that all of the taxpayer funds were ultimately used for legitimate purposes.

The never-before-exposed practice of hiding the funds dates to 1988, council aides said last night.

"It was used at the speaker's discretion," said an insider who worked for the council at the time it was headed by Quinn's predecessor, Gifford Miller. "People would come in and say 'We need money for this or that.' "

Sources said it may have been started to make an end run around the City Charter, which requires that all funds be allocated at the start of the fiscal year. That limits the speaker's ability to dole out monies throughout the year as needs arise.

In the interview, Quinn, who plans to run for mayor next year and has made "transparency" in budgeting one of her pet causes, admitted she knew some funds were being held in reserve, but learned only several months ago they had been allocated to sham organizations.

Quinn said she ordered that the shady practice be abolished and only recently discovered her staff had not complied.

"I was kind of sick over the fact that there were things listed in the budget that were not accurate and that my instructions to the staff were disregarded," Quinn told The Post.

When she learned several months ago that the practice had continued, Quinn said she turned over information about the bogus bookkeeping to "appropriate authorities," including the city Department of Investigation and the Manhattan US Attorney's Office.

Quinn's aides insist she blew the whistle on the practice, but authorities have been investigating some aspect of the council's finances since last year, sources have said.

Quinn recently hired an outside law firm to help comply with requests from investigators for documents and information dating back several years.

In a development that sources said was tied to the scandal, two of Quinn's top finance aides were either forced out or resigned earlier this year.

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QUINN TARGETING TERM FOE'S PLUM
New York Post, By SALLY GOLDENBERG and DAVID SEIFMAN, October 15, 2008

In a major power play, City Council Speaker Christine Quinn is threatening to oust a powerful committee chairman because he is a leading opponent of extending term limits, The Post has learned.

Sources said Councilman David Weprin (D-Queens) could be stripped of his post as chairman of the Finance Committee for speaking out against legislation engineered by Mayor Bloomberg and Quinn to allow officials to serve a third term.

The speaker is dangling the prized chairmanship, worth an extra $18,000 paycheck above the regular $112,500 council salary, before legislators who have not decided how to vote on the explosive issue, sources said.

One source said Quinn indicated there will be "significant reorganizing of everything, like the Finance Committee" next year after the council elections.

Weprin, in his second term in the council, has repeatedly bashed the proposal but has not said whether he would run for a third term if it passes. He could not be reached for comment.

Another critic who could get the boot is General Welfare Committee Chairman Bill de Blasio (D-Brooklyn), one of the loudest critics of the term-limits deal. He earns a $10,000 stipend for his chairmanship.

"That would be extraordinarily inappropriate," de Blasio said of the possible ouster. " I have not heard that, but if they attempt that, I will make a very public issue out of it."

Quinn has denied that threats or promises are being used to corral votes, and on Sunday said accusations of "horse trading, arm twisting, anything of that nature, is just quite frankly false and untrue."

Quinn will soon have at least three other chairmanships to lure undecided members. John Liu, who chairs Transportation, Michael McMahon, who heads Sanitation, and Tony Avella, who oversees the influential Zoning Subcommittee, all plan to leave the council next year.

Members could vote as early as Oct. 23, and the council will hold public hearings at City Hall tomorrow and Friday.

When asked by a reporter about Quinn's arm twisting, Bloomberg defended her.
"Her job is to corral people and convince them to support legislation," he said. "This is an administration-sponsored bill . . . Do you really want us to not go out and promote [it]?"

Last night, the executive board of the teachers union voted to oppose any changes to term limits, except by voter referendum. The issue goes before the full union today.

During a rally at City Hall opposing the legislation, state Sen. Kevin Parker (D-Brooklyn) called the mayor "the worst kind of petty, grubby little politician that
anybody has ever seen in this city."

Bloomberg, who endorsed Parker's opponent in the September Democratic primary, scoffed at the comment, saying, "I didn't hear him and I wouldn't dignify anything like that with a response."

david.seifman@nypost.com