Monday, July 16, 2012

The Economic Deception Corporation

We have touched on the slight of hand that is going on with the reorganization of NYC EDC-but this entire scam cries out for elected officials to weigh in and expose the phoniness and waste of money that this entails.Put very simply, there is absolutely no need for EDC to reorganize so that it can engage in direct lobbying.

As one smart political veteran has told us:

"Legally I can’t see how this bifurcating resolves anything because these entities will continue to be taxpayer funded entities under a master contract with DBS/the City.From an IRS perspective you can set one up as a C(4) and that can do lobbying but how does that take away the public interest/public policy problem of an arm of a public benefit corp that is a ©3 lobbying through an affiliated third party? If the C4 is still going to use staff and public funds from EDC (like the IDA does) this solves nothing."

Or, as we said this morning, it's still baloney no matter how you slice it. But as our friend points out: "To be clear a free standing privately funded c3 can set of a c4 and do this but once you involve public funds and public control it starts looking like a shell game. No other city agencies lobby the council or legislature. Instead The Mayors’ office working through City/State legislative affairs does this."

So why then does EDC need to do this? In our view, only if there is an expectation that the newly constructed lobbying arm will be construction Potemkin Village grass roots front groups to create the impression of local support for questionable projects. As our friend says:

"The Mayor and City Legislative Affairs Office were always empowered to lobby the Council for the Mayor’s land use and economic development priorities. Setting up and funding and directing another local LDC to create the veneer of a grass roots independent entity was obviously overreach. Trying to preserve the right to do so suggests that after 10 years Mayor Bloomberg still doesn’t get:

1)the historical purpose, powers and mission of EDC and 2) the limits to mayoral power."

When the mayor wanted to promote his education agenda he added at least two dozen new staffers to the DOE's press office-and that doesn't scratch the surface of the new hires. If more effective lobbying is Bloomberg's concerns he can do the same with his legislative office-bulk up staff. As our smart friend tells us:

"The legal way to do this is (and was) for the Deputy Mayor of Economic Development to advise the Mayor’s Office of City (and/or State) Legislative Affairs of its legislative agenda. City Leg “lobbies” all the time for the Mayor’s prerogatives and preferences tying these to the Budget and other benefits. In the case of the City Council no one can tell the Executive branch it can’t horse trade with the municipal legislative branch."

What this means is that the City Council needs to exert a modicum of oversight over the EDC reorganization-a lot of funny business is going on-and has gone on-and the council should do its job and get to the bottom of all of this.