Dishonor Roll: The 29 City Councilmembers Against Democracy: Kendall Stewart

Showing posts with label Kendall Stewart. Show all posts

Tuesday, November 11, 2008

The Dishonor Roll - The Shame of New York

Erik Dilan

Brooklyn Pol Put $187G of Your Dough into Wife's Nonprofit

Daily News, BY ROBERT GEARTY, BENJAMIN LESSER AND GREG B. SMITH, April 22nd 2008

Jannitza Luna, district leader for the Brooklyn Democrats, was on husband Erik Dilan's staff before she started running North Brooklyn Community Council, whose office (above) is on Wilson Ave.

Brooklyn city councilman Erik Dilan has funneled more than $180,000 in taxpayer money into a small nonprofit run by his wife, the Daily News has learned.

Dilan (D-Brooklyn) was sole sponsor of "discretionary" city funds for the North Brooklyn Community Council, a nonprofit that started out organizing youth football and has expanded almost entirely with government money.

His wife, Jannitza Luna, has been executive director of the group since at least 2005, tax records show.

She was on Dilan's staff before she began running the nonprofit, and she is a district leader for the Brooklyn Democrats.

Each City Councilmember gets a pot of "discretionary" money to use for pet projects in their districts. Potential misuse of these funds is at the heart of an ongoing probe by the city Department of Investigation and the Manhattan U.S. attorney.

Two aides to City Councilman Kendall Stewart (D-Brooklyn) have been charged with embezzling $145,000 from a nonprofit supported with "discretionary" funds. Stewart has not been charged and denies wrongdoing.

The News also disclosed that City Councilwoman Maria del Carmen Arroyo (D-Bronx) sponsored $80,000 in member items for a Bronx nonprofit that employed her sister and a nephew.

In an interview with The News, Dilan said he disclosed the conflict to the City Council and that no one objected, although a letter sent to the Conflicts of Interest Board obscures details of the arrangement.

At least three times in the past three years, Dilan sponsored member items for the North Brooklyn Community Council totaling $187,500. The amounts grew each year, from $30,000 to $57,500 to $100,000.

He was engaged to Luna sometime in 2006 and they got married in March 2007, he said. During that time, she was listed on the group's tax forms as the only salaried employee.

On the latest tax form filed, 2006, she claims a salary of $45,000. The group also paid $34,658 to unnamed "consultants."

On Friday, at the group's small storefront office in Bushwick, a receptionist told a reporter she would give Luna his number. Luna did not return the call.

In its last filing, the group claimed it organized youth sports teams. In an interview, Dilan said the group, which first reported income in 2004, is now doing less sports and more of what he called "immigrant services."

Each year, at least 90% of its funds come from either city or state taxpayers. Brooklyn Democratic leader and Assemblyman Vito Lopez sponsored a $50,000 state "member item" for the group last year, records show.

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

Lewis Fidler

From the Room 8 blog

Pork Pig Fidler’s Media Friends Put Lipstick On Him

You would never know it from the media that Councilmember Lewis Fiddler funds one of the city’s largest non-profit patronage operations in the city. Coming in with the third highest amount of member items in the council, with just over $700,000, Lewis Fidler, assistant majority leader and Chairman of the Youth Services Committee, said he is proud to be considered the third "biggest pig" in the council. The Councilman uses the city’s budget to provide jobs for his friends, campaign workers and to continue the illusion that a once-powerful club is still going strong.

Today’s reporters do not cover politics like Jimmy Breslin, Jack Newfield, Pete Hamill, Murray Kempton and other members of their hard-working greatest generation, who understood neighborhood politics and never quoted politicians like celebrities. Reporters of Newfield’s era understood that elected officials always had motives, and that truth could only be reported by analyzing their words and investigated their actions. Fidler is one of the most quoted councilmembers in the city’s newspapers and blogs on virtually every topic and issue, except for one: what he does with the member items money in his district.

Some people claim that the way the media covers Fidler shows a racial bias in its reporting of political corruption. By reading the dailies we know how Councilmembers Erik Martin Dilan and Leroy Comrie sent member items funds to nonprofits that hired their wives. Maria del Carmen Arroyo sent money to nonprofits that employed her sister and nephew. Darlene Mealy tired to find a nonprofit to hire her sister. Hiram Monserrate, Larry Seabrook and Kendall Stewart used nonprofit money to help in their campaigns.

What is never covered is a more complicated corruption in the white community where member item funds and campaign contributions go through interlocking nonprofits, lobbyists and special interests developers. Umbrella nonprofits like Fidler’s Millennium Developers are just the tip of the iceberg of corruption; Emily Giske of Bolton-St. Johns, Parkside’s Evan Stavisky, Jeff Plaut’s Global Strategy, George Artz, Yoswein, Geto & De Milly, and Knickerbocker SKD help campaigns more than Councilman Hiram Monserrate’s nonprofit Libre get a free ride from the media’s corruption coverage.

Putting racial motives aside, it is clear that the owners of the mainstream media control how and when it reports on political corruption. Not one word has been printed about the councilmember items slush fund scandal since all the major papers’ editorial boards came out for extending term limits. Earlier this year, for a few months, there was a story almost every day about the council’s member item’s “little tin box”.

Fidler’s Member Item-Funded Nonprofit Reelection Industry is a Widespread Practice
The late former Assemblyman Tony Genovese, who made the Thomas Jefferson democratic club into a powerhouse with the late county leader Meade Esposito, invented the scheme which uses member items and other government funds to build political power for their club in their district. They set up an umbrella nonprofit called New Perspectives that received and distributed government funds to most of the local nonprofits in their community. Genovese wanted all power to emanate from his club. His clubhouse hack pal Alan Weisberg ran Perspectives. Genovese’s Assemblyman Stanley Friedman was the last elected official in the city to open up a district office outside the Jefferson Club. In the days of Tammany Hall all elected officials operated their district office out of the clubhouse. Genovese and Esposito’s genius created the umbrella nonprofit funded by the government tied to the clubhouse to keep the Thomas Jefferson Club powerful in an era in which most clubs were dying off.

Since that time, elected officials and consultants throughout the city have copied Genovese’s umbrella nonprofit model. Brooklyn Democratic Leader Vito Lopez, an early protégé of Genovese, funds the Ridgewood Bushwick Senior Citizens Center as an umbrella-type nonprofit with millions of dollars in government patronage to his district. Bolton-St. Johns’ Emily Giske uses the High Line and the health care industry to build an umbrella for her team, including $50,000 to Speaker Quinn for her mayoral campaign from High Line supporters. The Parkside Group used their relationship with former Speaker Miller, former Queens Democratic leader Tom Manton and convicted felon Brian McLaughlin to pull in over $7 million in consulting fees from nonprofits receiving council funding. Former Thomas Jefferson Club leader Bruce Bender, now working for as chief lobbyist for Atlantic Yards developer Bruce Ratner, helps fund Borough President Markowitz’s umbrella nonprofit Best of Brooklyn. Pedro Espada just defeated State Senator Efrain Gonzalez with the help of his nonprofit organization, Soundview Healthcare.

Fidler and the Jefferson Club’s Nonprofit Patronage Networks
After Genovese’s death New Perspectives got in financial trouble, so Fidler and the other new stewards of the Jefferson Club simply closed it down and transferred Perspectives’ functions to a new nonprofit, Millennium Development. Paul Curiale, the husband of Fidler’s council aide Debbie Malone, runs Millennium Development. Both are heavily involved in the operation of the Thomas Jefferson Club and regularly collect signatures for candidates endorsed by Fidler’s club.

Another way Fidler controlled government money was to appoint Georgia Hamilton, the wife of his driver Daniel MacBride, to Neighborhood Advisory Board 18. The board distributed city and federal youth money in Fidler’s district. Fidler knows a lot about how funds are distributed through the Neighborhood Advisorary Board system as chairman of the Council’s Youth Services Committee. With the Councilman’s knowledge, Hamilton illegally continued to serve on the Advisory Board after she moved out of the community. Fidler said in a recent blog post that he received the most discretionary funding last year at $985,000, and snagged a considerable amount of capital too, because he chairs the Youth Services Committee, which oversees a lot of the programs in the city that would be eligible for these types of grants. "Which is also why I am able to put together a pot of properly vetted discretionary items,” said Fidler.

What the Press Did Not Report
As Chair of the Youth Services Committee, Fidler oversaw the funding of the Donna Reid Memorial Education Fund. Two staffers of Councilman Kendall Stewart, including his chief of staff Asquith Reid, were indicted by U.S. Attorney Garcia for skimming at least $145,000 from the Donna Reid fund, a charity that had received council funds. Fidler’s committee funded the Memorial Education Fund after the Department for the Aging rejected the group's application for city money in 2004 after noticing that its office address was identical to Asquith Reid's home address. Reid, like Fidler’s staffer Georgia Hamilton on Board 18, was a member of his Neighborhood Advisorary Board – Board 17 – which funded youth groups like Donna Reid in his community. Councilman Erik Martin Dilan’s North Brooklyn Community Council and Councilman Hiram Monserrate’s Libre are other nonprofits that have been funded with council funds dispensed by Fidler’s Youth Service Committee that have been written about in the press for their practice of hiring the councilmembers’ family members and helping in their reelection bids. Not one word has been written in the press about how the questionable funding was approved for these and other nonprofits by Fidler’s Youth Committee, which, by the way, he gets paid $10,000 extra a year for chairing.

Judging by a series of recent loses by the Thomas Jefferson Club, Fidler’s funding of the nonprofit Millennium network is about the only thing keeping the councilman’s club from falling apart. Last year, the club lost its control over the Brooklyn Surrogate Court when its candidate Judge Shawndya Simpson lost to Judge Diana Johnson. Judge Johnson only lost by 200 votes in the club’s 59th district and won in the Assembly District where Fidler is District Leader (the 41st AD) two to one. The Club’s former Assemblyman and Surrogate Judge Frank Seddio was pressured into retirement, according to The Daily News, because of illegal contributions from his Assembly account to Fidler and other elected officials of the Jefferson Club when he was running for the surrogate judgeship. The club lost the other Surrogate position in 2005 when Judge Margarita Lopez Torres beat their candidate. In addition, the Jefferson Club only managed to get 11% for the candidate it backed in the 2005 Democratic Mayoral Primary, Gifford Miller. In the General Election that same year, Fernando Ferrer, the Jefferson Club’s endorsed candidate, only got 27% in its district. Moreover, in 2001, the club’s candidate in the Democratic Primary runoff, Mark Green, failed to carry the Jefferson Club’s district or Fidler’s District Leader district. Finally, in the primary that same year, the club’s City Councilman Herbert Berman lost the controller’s race to William Thompson.

Fidler’s smart enough to know his good relationship with reporters allows him to get away with almost anything

Fidler represents a boutique niche market lending company called LawCash. Fidler’s cousin was made V.P. of the company right after he graduated college. New York Supreme Court Justice Ira Warshawsky said that LawCash, which advances money to plaintiffs while their civil lawsuits are pending, charges high usurious rates. The judge blasted LawCash for making a high-interest loan to a poor African-American family. LawCash has charged 50% or more in interest for one of their loans. Fidler’s loan company operates like subprime mortgages in that they both take advantage of the uninformed poor. A representative of LawCash said his firm can charge such high rates because, unlike banks, its money is "advanced," not lent, to plaintiffs, and this is a high-risk investment. When elected officials use their position to make money and deliberately fail to protect the public by promoting weak laws and regulations, the people suffer. Wall Street called derivatives trading “barter” instead of an insurance policy to avoid government regulations. Now the federal government must bail out that $600 trillion dollar business. Many of the high level consultant firms in the city today call their services education to avoid lobbying regulations. They make secret deals between each other in a type of exclusive “Star Chamber” that runs campaigns, nonprofits, and healthcare institutions without any legal requirement to report their cooperation on city or state financial forms.

Fidler is the District Leader in the 41th Assembly District, which has a minority population of at least 65%. Not only is the Councilman not protecting his own voters from high-interest lending operations, he profits from one. Yet the press reports that Councilman Fidler is fighting predatory lending. If you Google Fidler on predatory lending you will find articles that quote him speaking out against subprime mortgage lending. Fidler supported Frank Seddio for Surrogate Judge. Right after Seddio left the Surrogate Court he advertised in local newspapers his services to get homeowners subprime mortgages in Canarsie as a mortgage lawyer. According to Crain’s, Canarsie has the highest subprime default rate in the city. Fidler was also frequently quoted in the press how he was trying to reform Brooklyn’s corrupt judicial systems with a Blue Ribbon Commission, while he and his club backed every Norman machine judge, many of who were removed from the bench. Some went to jail.

What never gets printed in the press is how Fidler uses his control of nonprofit funding to eliminate political opposition in his community. When minority Assembly candidate H. R. Clark showed up to protest overdevelopment at a City Planning Commission’s local hearing in a building owned by a nonprofit funded with government funds, he was thrown out. According to neighborhood activist Mark Fertig, Fidler was under pressure by Assembly candidate H. R. Clark and community leaders since their meeting last year with mayoral candidate Tony Avella to downsize zoning in his district. To this day the area has not been downzoned. According to Fertig, all Fidler wanted to do is show the appearance of doing something while protecting his developer friends from downzoning.

Fidler has even figured out how to rip off the Campaign Finance Board (CFB) to make money for his friends when he runs for reelection. Fidler wrote a letter to the CFB in 2003 to qualify for full campaign finance funding after the CFB ruled he would only get 25% of the matching funds because he did not have a serious primary or general election challenger. All that is needed to quality for full funding is a letter from the elected official to the CFB saying they have a competitive primary. Fidler got $82,500 in 2003 in matching funds, the full allowable amount, and went on to get 87% of the vote in his so-called “competitive race.” He wrote the same letter to the CFB in his 2005 reelection bid and received full public funding in both a primary and general election he won overwhelmingly.

Besides using the government for political gain Fidler has not show much loyalty to his supporters. Fidler supported Ferrer for mayor in 2005, going back on the endorsement commitment he gave to Gifford Miller after the Speaker passed that year’s city budget, which contained Fidler’s pork requests for his district. Two-timing is something Fidler has always been known for. He supported Anthony Weiner for City Council against his own cousin, Michael Garson. When Weiner’s council seat became vacant in 1998 after he was elected to congress, Fidler supported Michael Nelson against Irma Kramer, despite the fact that Kramer was one of Fidler’s earliest supporters.

Sometimes Fidler’s double crosses are a work of art. At the same time Fidler’s committee was funding Councilman Stewart’s indicted aide’s nonprofit, according to Wellington Sharpe, Stewart’s 2005 Council opponent, Fidler was helping Sharpe with his ballot access. Sharpe was later knocked off the ballot after Stewart’s lawyer brought him into court and produced a mortgage prepared by Fidler that was supposed to turn over a house to Sharpe’s kids, but actually showed Sharpe as the primary resident of the house, which was outside of Stewart’s district.

“Educate and inform the whole mass of the people... They are the only sure reliance for the preservation of our liberty.” - Thomas Jefferson

The false way Fidler is covered by the media, while he rips off government funds to accumulate power is just a warning sign of how the press is endangering the lives of New Yorkers. Our City and Republic are in jeopardy because today’s media has abandoned its role of informing the public, leaving the people powerless to defend themselves. What the press did not tell the public during the term limits debate was that the two-term restrictions were voted for by a public that was upset with the corruption in the Koch Administration in the 1980’s and the role that the City’s impossible-to-defeat incumbents played in allowing that corruption. Now even that small safeguard against incumbent protection in our society is gone. George Orwell would have to write a new chapter in 1984 to explain how 34 City Councilmembers under investigation for illegally using the member items slush fund were able to receive press coverage that basically said that extending their time in office would increase choice, democracy and improve our economy.

Without an informed public, elected officials act like organized crime mobsters, working against the voters’ needs for personal gain. They create government-funded umbrella-type nonprofit reelection organizations to stay in office. They also create a dysfunctional, unregulated government with no legal accountability to carry out their greedy friends’ scams to make money at the cost of the public good. Our city would be a lot better off if it listened to a few independent voices about the dangers of repealing the Glass-Spiegel Act, rather then constantly devoting their coverage to political celebrities and their meaningless news conferences.

Look at what Gordon Gecko’s greed has done to Wall Street. New York City is next!

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Donna Reid Fund's Other Benefactors
Daily New Blog, April 17, 2008
As The Post details, Councilman Kendall Stewart wasn't the only Brooklyn lawmaker to direct discretionary dollars to the Donna Reid Fund headed by his now-indicted chief of staff.

All told, the Council sent $356,000 to the fund, between 2005 and 2007, with $211,000 being used for legitimate purposes and $145,000 allegedly embezzled by Asquith Reid and his co-conspirators, including two who remain unnamed and his fellow indictee - and Stewart syaffer - Joycinth "Sue" Anderson.

During that same time period, two other Councilmen allocated member items to the Donna Reid Fund - Lew Fidler ($20,000) and Bill de Blasio ($5,000). The Fund also received $24,000 from the entire Brooklyn delegation in 2006.

In an interview last night, de Blasio, an '09 Brooklyn borough president candidate, proclaimed the misuse of the Donna Reid money "totally disguting" and "obscene," and said he had never had any indication the cash was being used for anything other than its stated purpose - providing tutoring to public school kids.

De Blasio said he didn't know Asquith was involved with the group, and decided to make the member item allocation based on Stewart's "glowing" review of its work.

Fidler reiterated that he had originally allocated member item money to the Donna Reid Fund after the group made a "public, open presentation to the Brooklyn Council delegation at a hearing for a computer program for kids in public school."

He said he renewed the grant twice at the request of a school principal, adding: "They much have been doing something right."

"Unfortunately, when money is inolved, no matter how it gets there, sometimes people attempt to steal it," Fidler said. "It was not the member item process that was at fault."

In regards to the funds allocated jointly by all 16 Brooklyn members, I'm told each delegation handles this a little differently. But in the case of Brooklyn for the years in question, all groups had to make in-person presentations and submit both details of their budgets and plans on how they planned to use the money. The members voted by paper ballot to determine which groups would get funded.

Both de Blasio and Fidler said the indictments don't change their concerns about the RFP process for member item allocation proposed by Council Speaker Christine Quinn.

If anything, they noted, the failure of DFTA to alert DYCD that the Donna Reid Fund's initial request for cash had been rejected due to a conflict of interest regarding Asquith demonstrates letting agencies make the final call about who gets what wouldn't be foolproof.

Tags:
Brooklyn , City Council
By Elizabeth Benjamin on April 17, 2008

Sunday, November 9, 2008

Maria del Carmen Arroyo

Council member in funding flap
Daily News, BY ROBERT GEARTY and GREG B. SMITH,April 17th 2008, 4:00 AM

Maria del Carmen Arroyo says her sister and nephew had left the nonprofit by the time the group was given the money. Bronx City Council member Maria Del Carmen Arroyo has a unique way to get taxpayer support for her family.

Last year she sponsored $82,500 in Council "discretionary funds" into a nonprofit that employed both her sister and nephew, the Daily News has learned.

Arroyo's sister, Iris, was "fiscal officer" for the South Bronx Community Corp., where a former employee accused her of incompetence that led to thousands of dollars of federal liens filed against the group.

Iris Arroyo's son, Richard Izquierdo, was also listed as an executive at the agency; he claims he's not paid.

The Arroyos' arrangement comes as the feds charged two staffers of City Council member Kendall Stewart on Wednesday with embezzling discretionary funds through their nonprofit.

No one has been charged with a crime in the funding of the nonprofit that employed Arroyo's relatives, and Stewart himself has not been charged with a crime.

Each City Council member is given a set amount to spend annually on "discretionary" items that are usually pet nonprofit causes within their districts.

Stewart's aides were charged with siphoning off $145,000 in such funds through a nonprofit he funded.

Council member Arroyo is the former director of South Bronx Community Corp., which purports to "provide various services to the elderly, disabled and low income families" in the Bronx. Her mother, Assemblywoman Carmen Arroyo, was director of the nonprofit years before.

In her Council biography, the younger Arroyo claims to have been a "volunteer" at South Bronx, though records show her collecting $33,000 to $45,000 a year in 2001 and 2002.

She left the nonprofit after being elected to the Council in February 2005. Early last year, she was co-sponsor of a $75,000 "member item" and sole sponsor of a $7,500 member item for South Bronx Community Corp., records show.

Arroyo confirmed Wednesday she'd sponsored the money for the group, but insisted it was allocated only after her sister, Iris, and Iris' son, Richard, had left.

"I know that when the Council discretionary funds were allocated, I know that they were no longer there," she said.

Nevertheless, she couldn't say when her sister left. As of February 2007, Iris Arroyo was signing tax documents as the group's "fiscal officer," records show.

Also the group received $50,000 in discretionary funds in 2006, although at the time sponsors were not publicly listed.

The 2007 discretionary money was to go for senior programs administered by the Department of Aging. Wednesday, a contradiction emerged regarding that agency.

With Stewart, prosecutors say the Department of Aging recently rejected his request to fund a nonprofit run by his chief of staff, citing conflict of interest.

Nevertheless, the agency appears to have approved Arroyo's funding of a nonprofit employing her sister and nephew.

A spokesman did not return calls.

In a lawsuit, a former employee questioned the competence of Iris Arroyo, claiming she failed to keep up with payroll taxes and as a result, federal liens were placed on the South Bronx Community Corp. in 2000 and 2001.

The liens were settled, but reemerged in 2006 with a new lien for $48,000. That remains outstanding.

The former employee, Belinda Santos, once an Arroyo inlaw, said in court papers she urged Iris Arroyo to keep up with the payroll taxes and quit because Iris would not listen.

In response, Izquierdo blamed Santos and accused her of using South Bronx monies to pay her car insurance. Santos denied using money for personal benefit.

The case was settled with South Bronx acknowledging the lien was its responsibility.

The nonprofit has also benefitted from state taxpayers, care of Arroyo's mother, the assemblywoman. She co-sponsored state member items totalling $141,500 for the agency while it employed her kin, records show.

Assemblywoman Arroyo did not return calls.

Friday, November 7, 2008

Kendall Stewart

Two Council Aides Face Federal Charges
New York Times, By William K. Rashbaum, 4/16/08

A former top aide to City Councilman Kendall Stewart of Brooklyn and another former Council staff member were indicted today on federal fraud and money-laundering charges that accused the aide of stealing more than $145,000 from a nonprofit program that was supposed to tutor public school children.

The indictment, unsealed this morning, charged that Mr. Stewart’s former chief of staff, Asquith Reid, used much of the money for personal expenses, including sending $31,000 in the nonprofit’s money to family members and friends in Jamaica via Western Union.

Mr. Reid, according to the indictment, was Mr. Stewart’s contact person for his requests for discretionary Council monies, a fund of millions of taxpayer dollars allocated annually by the Council to nonprofit organizations “purportedly for the public benefit.” Council members have broad discretion to choose how to spend the money.

The charges were announced today by Michael J. Garcia, the United States attorney in Manhattan, and Rose Gill Hearn, commissioner of the city’s Department of Investigation.

“Without transparency and accountability in a budget process, discretionary items are ripe for abuse,” Mr. Garcia said. “Taxpayer money allocated to fake non-profit 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, scrutinizing those allocations most vulnerable to abuse by those in position of public trust.”

Ms. Gill Hearn said a new unit set up by her office to examine nonprofits receiving city funds now has over thirty active cases.

She said the cases, “demonstrated corruption vulnerabilities that were thriving because of obscure processes and lax and non existent oversight.” She added, “Along with our colleagues at the U.S. Attorney’s Office, last year we decided to do a proactive comprehensive look at the award, allocation and tracking of council discretionary funding. In short order we discovered that our concerns were well founded. We found the council’s use of fictitious organization as a place to park millions of dollars worth of discretionary funding creating obscurity with respect to the origin, destination, purpose and benefactors of that funding.”

The charges come just days after disclosures that the office of the City Council speaker, Christine C. Quinn, had appropriated millions of dollars to nonexistent organizations, instead of routing the money to organizations favored by individual council members. The accounting sleight-of-hand allowed Council members to later tap the funds for projects without getting approval from the mayor, but no allegations have yet been brought forward that it was used to misappropriate funds. Mr. Garcia would not answer questions about whether allocation the money to fictitious organizations was a crime. Neither would he say whether Ms. Quinn was a target of the ongoing inquiry.

No accusations have been leveled against Ms. Quinn, and has said she is not a target of the investigation by Manhattan federal prosecutors and the city Department of Investigation, which were expected to announce the indictment this afternoon.

Ms. Gill Hearn praised the speaker’s proposed reforms, announced on Friday. “I think the fact that the Speaker is taking a look at the fictional organizations is the right thing and is commendable, though reforms that she laid out last Friday are, I gather, being analyzed and debated over at the Council,” she said at her agency will also have recommendations coming out of the investigations.

Mr. Reid faces a maximum of 80 years in prison, Mr. Garcia said, and Ms. Anderson faces a maximum of 40 years.

Mr. Reid and the other former staffer charged, Joycinth Anderson, were expected to be arraigned later this afternoon. Neither they nor their lawyers could be reached for comment.

Mr. Stewart, a licensed podiatrist who represents Flatbush, East Flatbush, Midwood and Flatlands, said in a brief telephone interview that he had known that the Donna Reid Memorial Education Fund was operated by Mr. Reid and was in fact named after his daughter, who died from an illness at a young age. Mr. Stewart said he had not yet seen the indictment and could not comment on it.

His lawyer, Howard H. Weiswasser, said he had no reason to believe that the councilman had done anything improper or illegal. “To my knowledge he is not a target of the investigation,” Mr. Weiswasser said.

The Donna Reid Memorial Educational Fund initially applied for discretionary Council funds through the city Department for the Aging, the indictment said. But the agency rejected the application because the address reported for the fund was Mr. Reid’s home.

The group later sought discretionary funds though the city Department for Youth and Community Development, which approved the application and since November 2004, provided approximately $356,000, more than three quarters of the group’s total income during that time period, the indictment said.

Among those monies were approximately $14,000 of funds allocated to the fictitious nonprofits, the indictment said.

The charges also accused Mr. Reid of spending $18,000 of the Donna Reid group‘s money on a campaign function for a political club controlled by Mr. Stewart and $3,000 on campaign literature for him.

The indictment charges Mr. Reid and Ms. Anderson with conspiracy to commit mail fraud, money-laundering conspiracy and two counts of witness tampering.

According to a statement that Representative Major R. Owens made in the House of Representatives in 1997, Mr. Reid was born in Hanover, Jamaica. He graduated from Kingston Technical High School and served in the Air Force from 1963 to 1967. He graduated from Kingston Technical College with a degree in electrical engineering. He and his wife, Dean, had two daughters, Michelle and Sharon.

Among the politicians Mr. Reid has aided over the years are Assemblyman N. Nick Perry, State Senator John L. Sampson, former Councilwoman Una S. T. Clarke, and Mr. Owens, who retired from Congress at the end of 2006.

Sunday, November 2, 2008

Miguel Martinez

Councilman sent $406G to nonprofit with sister on board
BY BENJAMIN LESSER, FRANK LOMBARDI and GREG B. SMITH
DAILY NEWS, Friday, April 25th 2008

Manhattan City Councilman Miguel Martinez has shipped hundreds of thousands of taxpayer dollars to a nonprofit group where his sister sits on the board of directors, a Daily News probe has found.

This fiscal year, the Council awarded the Upper Manhattan Council Assisting Neighbors $669,000 in so-called discretionary funds, of which $406,000 was sponsored by Martinez alone, records show.

Martinez's sister Maria has been a member of the nonprofit's board since 2005. She is listed in city records as the group's secretary. Councilman Martinez's photo is posted on the group's Web site under the title "Major Sponsor."

Martinez did not return calls seeking comment, but the group's director, Hector Santana, said the councilman's sister was an unpaid volunteer board member at the nonprofit.

Santana said board members decide how to spend the group's money. He said there were no other relatives of Martinez working at Upper Manhattan.

Miguel Martinez revealed this conflict in new disclosure forms required of all Council members for the first time this year.

The form, which has no date, reads, "My sister sits on board of the organization," and attaches a list of nonprofits with a check mark next to Upper Manhattan Council Assisting Neighbors.

Santana acknowledged that Upper Manhattan got little city money in the years before Maria Martinez joined the board.

After that, records show, the Council awarded Upper Manhattan $75,000 in fiscal 2006 and $124,111 in fiscal 2007. This year, it topped $600,000.

"The money is definitely being spent where it's supposed to be," Santana added.

It's impossible to independently confirm whether Maria Martinez has received any compensation from the nonprofit because the group has not filed tax forms.

Santana said the group did not take in enough money to require tax filings before 2005 and was preparing to file its 2006 form in the coming weeks. He said Miguel Martinez is "a supporter of many organizations and this is one of them."

Martinez's funding for Upper Manhattan came out of several programs, including an immigration initiative and an anti-gang initiative.

The News reported Wednesday the city controller has frozen the $11.2 million immigration initiative pending review. On Thursday, The News learned the $1 million anti-gang initiative has also been frozen.

Council Speaker Christine Quinn has acknowledged that some of the Council's "discretionary" funds were assigned to fictional nonprofits to hold the funds for later distribution to real groups.

That unusual procedure and specific allocations are the subject of a probe by the city Department of Investigation.

Two aides of Councilman Kendall Stewart (D-Brooklyn) have been charged with embezzling $145,000 from a nonprofit funded with Council money.

The News has revealed that Councilman Erik Dilan (D-Brooklyn) funneled $187,000 into a nonprofit run by his wife, and Councilwoman Maria del Carmen Arroyo put $82,000 into a nonprofit that employed her sister and nephew.

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Martinez Fined for Campaign Violations
From the Inwoodite, 18 January 2008

Inwood City Council Member Miguel Martinez has been fined by the city's Campaign Finance Board for violating campaign finance laws.

According to the New York Times, the board claims the Martinez camp received reimbursements for expenses that it could not account for during the 2001 campaign, when the District 10 councilman was first elected. The CFB says receipts submitted by Martinez as proof of the expenses appeared to be fabricated, including some that contained an identical typo and others that were written using the same Microsoft Office template.

“If these were genuine expenditures, the campaign was unable to produce documents that showed it,” said Eric Friedman, a spokesman for the board. “Nor were the vendors. And they didn’t come back to us with records that were convincing to the board.”

The penalties were issued jointly against Mr. Martinez, his campaign committee and its treasurer, Placido Rodriguez.

Dick Dadey, executive director of the government watchdog group Citizens Union, called it one of the worst abuses in the history of the city’s campaign finance program, which began in 1989. “He wrongly took taxpayer dollars for his 2001 campaign and spent them on very questionable and unknown expenses,” Mr. Dadey said.

Martinez and Rodriguez were fined $44,780 and ordered to repay $127,786 in matching funds. The CFB says it is one of the most severe penalties it has ever levied.

Martinez, who sued the board over the allegations in 2004, continues to deny wrongdoing. He may appeal the decision.

According to the CFB, Martinez was fined over $31,000 in 2006 "for misrepresenting the source of contributions" in his 2003 campaign.

Council District 10 includes parts of Inwood, Washington Heights and Marble Hill.

Related on Inwoodite:
• Tuesday Showdown Between Old Friends
• Locals Tire of Espaillat, Martinez Feud

Posted by Brad on 18 January 2008 in CITY COUNCIL, POLITICS Permalink
Comments
I hope it's not true, but if it is, this is perhaps among the most shaming part of the story in the Times:

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The board got the injunction lifted on appeal, and in June reissued a detailed list of 11 violations totaling $84,000, which would have been the largest ever assessed for a City Council race.
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Because, again if the charges are true, it isn't run-of-the-mill New York political abuse, it's Tammany Hall level corruption.

But if that's the case, then why would this just be a fine assessed by the Campaign Finance Board and not an actual criminal indictment? Is something fishy about that, or is this just the way the city handles campaign finance violations?

Saturday, November 1, 2008

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.

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