Results tagged “slushfund”

Voters in certain City Council districts showed incumbents that they weren't happy with them, by voting out an unusually high number of Council members in yesterday's primary election. Why? A combination of voting for term limits plus other scandals. For instance, Alan Gerson (D-Manhattan), Kendall Stewart (D-Brooklyn), and Helen Sears (D- Queens) all supported the term limits extension—and all lost to challengers.

According to 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." See, the mayor's office can only direct money (and in this instance, it was "$1.1 million to Agudath Israel of America Community Services and more than $400,000 to Ohel Children’s Home and Family Services" between 2002 and 2006) when it's requested by a city council member or borough president—but the city council member, who is indicated as the one who requested the funding in documents, says he never asked for the money! City Councilman Simcha Felder (D-Brooklyn) told the Times, "I did not ask for it," while a mayoral spokesman said, "We have no reason to think that the funding analysis contains any errors. And we disagree with the councilman’s recollection." Yet, the Times adds, "The mayor’s office said it had no documentation showing that Mr. Felder had made the requests." And an Agudeth executive said it also went to the mayor's office for help. Last year, the City Council slush fund mess prompted the mayor's office to open up about its own slush fund.

On the heels of former City Councilman Miguel Martinez pleading guilty to stealing over $100,000 from taxpayers via slush funds, word is that investigators are eying the records of other local legislators with the possibility of more busts to come. The News says that "Martinez's scheme has offered probers a blueprint for how corrupt pols have tapped into secret slush funds." Yesterday on his radio show, Mayor Bloomberg discussed Martinez's fraud case saying, "It's an outrage. I've always thought if you steal from the public, it's worse than stealing from an individual because you're stealing from everybody. Hopefully, the judge will [sentence] as a punishment and as a disincentive to others to not steal from the public trough." While Martinez is currently out on a $250,000 bond, other nearby politicians at the epicenter of the investigation are keeping a watchful eye. At a dinner for Bronx Democrats this week, the Post says elected officials were (half-) joking that their conversations were possibly being recorded.

The first City Council member to resign as a result of a slush fund scandal wasted no time settling matters with the US Attorney's office. Today former Councilman Miguel Martinez pleaded guilty to money laundering and mail fraud, stealing in total over $100,000 intended for non-profit groups. In court today, Martinez said, "I received the money as a direct result of the conspiracy. I engaged in this scheme as a New York City Council member. I was able to engage in these schemes because I was a New York City councilman." Martinez copped a plea deal with prosecutors who recommended he be sentenced to around 4 to 6 years for charges that usually warrant up to 20, but the federal judge today noted that the court did not have to comply with that advice. The Times says Martinez had a "once-promising political career" while representing Washington Heights and Inwood, a seat that NY1 says will not have a special election because it would fall too close to September primaries.

City Councilman Miguel Martinez, who represents 10th Council District which includes parts of Washington Heights, Inwood, Marble Hill, has issued his resignation; CityRoom reports that his letter read, "Dear Speaker Quinn, Effective today, July 14, 2009, I am submitting my resignation to the New York City Council." Martinez has been under investigation by the U.S. Attorney's office for funding to a non-profit group; in March, the NY Times wrote, "The Upper Manhattan Council Assisting Neighbors, [which helps] small businesses and underserved Latino, immigrant and low-income people [in upper Manhattan]...received little city money until 2006, after Mr. Martinez’s sister, Maria Martinez, joined the board. Since then, the group has received more than $1.4 million in City Council funds including more than $400,000 sponsored directly by Mr. Martinez." Martinez has reportedly cut a deal with the feds to avoid prison time; the Post notes he is "the first elected official to be done in by the Council's slush fund scandal."

Two former aides of City Councilman Kendall Stewart will plead guilty to fraud charges related to embezzling nearly $200,000 of Council funds. Asquith Reid, Stewart's former chief of staff, and Joycinth Anderson, a former staffer, were indicted after an investigation revealed that money, which Stewart directed to three community groups (controlled by Reid and Anderson), was being used for cash or wired to relatives; the scheme was discovered during a probe of the Council's slush fund practices. Councilman Stewart (pictured) told the Times, "I hope they will not be serving any time. With all honesty, I don’t think they have done anything wrong. I think they are being punished for not keeping correct paperwork." But Jumaane Williams, who is challenging Stewart for his Council seat, said Stewart should resign, "At the worst, Mr. Stewart had to have been complicit and known what was going on. At the minimum, he signed off on things without reading it and wasn’t paying attention to what was going on in his office. Either one is very bad."

If you haven't had enough of (alleged!) Bronx corruption, here's more: The NY Times wonders where over $100,000 in rent payments to a nonprofit affiliated with City Councilman Larry Seabrook (D-Bronx) has gone. The Times reports even though Seabrook and two associates "incorporated...the African-American Bronx Unity Day Parade" as a nonprofit, "It has never received I.R.S. approval to actually operate as a nonprofit. It has never filed a tax return. And, it seems, it has never run a parade. But in recent years it has netted more than $100,000 in city money by leasing space at one price from Bronx landlords and then subleasing it at a far higher price to three nonprofit groups whose rents were later reimbursed by the city." The Times also has a handy graphic that tries to account for the money. Last year, the Village Voice looked at Seabrook's history of being investigated, recalling a 1986 incident, "Apparently annoyed that a Village-based newspaper was poking around his affairs, Seabrook waved away [reporter William] Bastone and a photographer when they approached him outside his Bronx office. 'Now don't you two go and get AIDS,' he said by way of good-bye."

The Post reports, "Mayor Bloomberg has lowered the budget ax on funding for several community organizations after determining the groups did not meet new standards." City Council members distribute $46 million to various non-profit community groups, but last year it was discovered that money was being left for phantom groups—with the money used by the Council Speaker's office for "future gaps"—so a new review process was put in place. A Bronx community center was disqualified due to "poor performance on past contracts" while four others, including a graffiti removal company, were were deemed to be for-profit. The Post adds, "Hundreds of recipients are still under review and have yet to receive funding."

Since the heat is on the City Council's budget practices, specifically its use of slush funds and creating fake groups to collect money, Mayor Bloomberg released details about his own, uh, slush fund. Deputy Mayor Ed Skyler issued a memo noting reforms plus details of the Mayor's discretionary funds. Per the Daily Politics, it explained how "the mayor himself controls a pot of cash...for which Council members and borough presidents can apply during budget negotiations to direct to the nonprofit of their choice."

Two former staffers under City Council member Kendall Stewart were "arrested and charged on mail fraud and money laundering charges" from the U.S. Attorney's office, according to WNBC.

Embattled City Council Speaker Christine Quinn has decided to proceed through the ongoing city slush fund scandal with the guidance of a defense attorney. Federal and City investigators are looking into the allocation of millions of dollars of budget money to fictional organizations. That money was then funneled to private groups, who often kicked back funds in the form of campaign contributions.

In the wake of City Council Speaker Christine Quinn's admission that her finance staff allocated money to fake groups, details are emerging about where the now-resigned top finance staffers now. And it turns out former finance director Michael Keogh, managed to get a job with big lobbying firm Bolton James (here's his bio), which is where Emily Giske, a friend and supporter of Quinn, is a partner.