Monday, July 16, 2012

EDC's Splitting Headache

Crain's is reporting on the reorganization efforts of NYC EDC-efforts that were forced upon it because of its lawless actions regarding the development of Willets Point:

"After its illegal lobbying led to a settlement earlier this month with the state attorney general, the city's Economic Development Corp. is not giving up trying to influence legislative decisions surrounding land use. Quite the opposite: It is restructuring so that its lobbying activities will no longer be against the law.

It has formed two new entities: the New York City Economic Growth Corp. and the New York City Land Development Corp. As early as Aug. 1, the EDC will merge with the EGC, assuming the EDC's name. The organization will be able to lobby, giving the EDC an advocacy ability it has lacked since the attorney general's investigation began several years ago."

All of this three card monte is simply a sham-and the idea that the new entity designed for lobbying will be independent of the parent is simply unbelievable: "Whenever the EDC is involved in land disposition, the land will first be transferred to the LDC, which will in turn hand it to over to EDC to do with it as it sees fit."

There was a good reason why the legislature separated these LDCs from lobbying: "They are not allowed to lobby as a result of a decades-old law designed to make sure their unique power to receive land while bypassing traditional bidding rules does not lead to corruption."

So, the organization that broke the law against lobbying-and initiated a corrupt scheme to deprive our property owners of their land-is now going to set up a lobbying beard that will be separate and apart from the EDC powers that be. What a laugh-and an indication why the AG's failure to sanction the entity was poor law enforcement.

What did get our funny bone tickled, however, was the allegation that this impediment to lobbying was the reason why EDC failed in its effort to redevelop the Kingsbridge Armory:

"The EDC agreed to suspend its lobbying while the investigation played out, which hamstrung its ability to fight for key projects, including the redevelopment of the Kingsbridge Armory in the Bronx. While the EDC could provide information to elected officials about its plan to turn the landmarked armory into a shopping mall and the potential impact of the project, it could not lobby for it. The City Council rejected the plan in December 2009 over concerns that the jobs would not pay high-enough wages."

What a load of crap. The City of New York is founded on a mayoral form of government that gives the chief executive inordinate powers-and there are good reasons why the city council has been seen as a rubber stamp. Almost all land use projects are approved by the council after some bickering over the crumbs that the city deems fit to hand out to placate the wavering council members.

The idea that there is the need to add another lobbying entity to enhance mayoral power is ridiculous-and camouflages the extent to which EDC is-and has always been-a mayoral agency. But this splitting of the agency into two fictitious parts should be rejected-challenged by the council because of its clear intent to end run the law.

As for the Kingsbridge Armory debacle that occurred not because EDC was hamstrung by a lobbying ban-but was instead stymied by the stone stupidity of Deputy Mayor Lieber-another refugee from Wall Street-and by the absence of the mayor who was global warming in Copenhagen at the crucial run up to the council vote. Of course, the stupidity of the plan and the intrasigence of the mayor's folks on the living wage contributed to the defeat as well.

What this tells us is that the AG erred in not sanctioning the miscreants at EDC for their illegal shenanigans-because the illegal lobbying was just the tip of the iceberg of the illegal activities engaged by the EDC in violation of its master agreement with the city. Let's not forget that EDC set up the Shulman LDC to not only advance its own interests, but those of the Shulman-led real estate developers as well-and did so by allowing a phny not for profit masquerade as a grass roots organization.

EDC did so because it wanted to create the appearance of strong community support-something that the Willets Point project lacks to this very day. What will the new lobbying entity be doing in the future, creating bogus community groups to pretend there's more local support for a developmment than actually exists?

Our comments to Crain's sums this charade up pretty well:

"The Willets Point opponents whose complaint launched the lobbying investigation called the reorganization a cosmetic move that changes little. "This latest sleight of hand reminds us of what former New York Gov. Al Smith once said: 'No matter how thin you slice it, it's still baloney,' " said a spokesman for Willets Point United."

Sunday, July 15, 2012

NYC DOI: Dumb or Ignorant?

The NYC Department of Investigation is going about town crowing about its work recovering tax payer monies from rampant fraud and abuse. As the Queens Chronicle reports:

"By definition, the city’s Department of Investigation tends to keep a low profile in its day-to-day operations. So it was uncharacteristic last week when the department touted a record year for investigations and enforcement in the fiscal year ending June 30. And DOI Commissioner Rose Gill Hearn, now in her 10th year in the post, was in a mood to brag about her staff in a statement issued by her office.

“This fiscal year the DOI closed more cases, made more arrests and recovered more funds than last fiscal year, all of which is a testament to the tenacious work of DOI’s team of investigators, rooting out fraud, protecting taxpayer funds and ensuring that corruption is exposed and stopped,” Gill Hearn said
."

A number of thoughts here. In the first place if there are a record number of arrests and recovered funds it just might mean that fraud and theft are rampant in the Bloomberg administration. But one of the cases that Gill Hearn cites, CitiTime, is in truth an exemplar of the cluelessness of her boss, no?

As the paper tells us: "The largest financial recovery by far was the $506 million settlement reached with the CityTime payroll contractor." But here was a case where the vaunted Bloomberg acumen on technology was absent as these techno-thieves kept on running up the billing-but, hey, congrats for closing the door after the horses have left the barn.

Juan Gonzales highlights the incompetency that led to the DOI's involvement:

"Federal prosecutors have finally begun to unravel one of the biggest scandals of the Bloomberg era. But one major question remains: Where were city officials all those years that computer consultant Mark Mazer and his cronies allegedly stole more than $80 million in taxpayer money from the CityTime project?"

All of this crowing also masks the fact that the DOI has been asleep at the switch when it comes to corruption in Queens-as Juniper Park's Robert Holden helpfully points out:

“Do higher numbers mean they are doing their jobs better or that there is just more corruption?” Holden asked. “If they are doing their jobs — and this is their job, what they get paid to do, root out corruption — great. If arrests are up in record numbers, if they are out there encouraging and protecting whistleblowers, great.”

But Queens, he said, always seems to be ground zero for corruption in the city. He cited the recent finding of an investigation into the Willets Point development plan by the state attorney general that found local groups, including one headed by former Borough President Claire Schulman, engaged in illegal lobbying practices. “This could just be the tip of the iceberg,” Holden said. “You can just look at those numbers in so many ways.”

And Commissioner Gill Hearn needs to answer why she has allowed the EDC corruption to go unpunished-with almost half a million tax payer dollars still in the hands of the Shulman LDC. That would be getting too close to the powers that be, however, and the commissioner will not likely bite the hand that feeds her.

Friday, July 13, 2012

Oversightless

The NY Times is reporting that the city council will hold an oversight hearing into the snafus over at the NYC Board of Elections:

"In the wake of a protracted and contentious vote count in last month’s Democratic Congressional primary in northern Manhattan and the Bronx, the City Council on Thursday announced it will hold an oversight hearing in an effort to determine what went wrong in the ballot-counting process."

And the ever vigilant council speaker is all over it-not wanting to allow anything to taint the democratic process:

"The Board of Elections’ inability to accurately tally and report the results of last month’s Congressional primary in a timely manner threatens the credibility of the democratic process,” Christine C. Quinn, the City Council speaker, said in a statement. “New Yorkers must be able to trust that when they cast a valid ballot, their vote will be counted accurately.”

Here, here-let's all raise a glass to Quinn for her vigilance-but isn't it strange that the speaker has remained mute over an even worse scandal, one that isn't hypothetical? We're talking, of course, about the city's illegal lobbying campaign-the one that tarnished the entire ULURP process over the development at Willets Point.

We know for certain that Claire Shulman lied directly to the city council when she was asked about the amount of city funds that EDC had given her group to lobby-illegally, as it turned out. Perhaps the speaker's muteness is a result of her longstanding friendship with the dowager borough president?

Whatever it is it speaks once again to the fact that for the last eight years-at least when it comes to economic development-Christine Quinn has been little more than a water carrier. And the only time she went against the mayor was over the Kingsbridge Armory when the Bronx delegation dragged her kicking and screaming into the opposition-all because her speakership was hanging in the balance.

What this means for us-and for all New Yorkers-is that Quinn, should she somehow manage to get elected mayor, will not be a voice for the small businesses and neighborhoods that stand in the path of mega-development. She has come a long way from the days when she was a stalwart community organizer in Chelsea fighting box stores. Perhaps, as Chuck Schumer has said about NY's junior senator, she has, "evolved."

Thursday, July 12, 2012

Vallone Clueless on Willets Point Illegalities

In this week's Times Ledger CM Peter Vallone demonstrates legendary cluelessness with his perspective of the illegal lobbying campaign conducted by EDC and Claire Shulman's LDC. In doing so, he makes his former council collegue, Joe Addabbo look like Diogenes:

"State Sen. Joseph Addabbo (D-Howard Beach) was on the City Council when it voted in favor of the project. In light of Schneiderman’s ruling and other revelations surrounding the Willets Point project, he believes the Council should at least hold a public hearing to determine if the project needs to go back to the drawing board.

“There are a lot of pieces here,” he said. “Maybe that’s an issue for the City Council to at least have a hearing.”

Indeed, but Vallone misses the entire legal point: "City Councilman Peter Vallone Jr. (D-Astoria) was also in the Council at the time and voted in favor of the project. He supported Schneiderman’s investigation, but said the group did not have any influence over his decision at the time and that the project should not be derailed for that reason."

Of course at the time Vallone was being lobbied by his father who represented the property owners and helped cut the sweetheart deals on the behalf of the group's heavy hitters-and as soon as that happened young Vallone was convinced. But what he is saying here is that it dosn't matter that in promoting the project EDC and the LDC broke the law - and this is from someone who wants to be the chief law enforcement officer of Queens?

And Vallone overlooks the fact that the Mets real estate arm Sterling Equities was a key stakeholder in the LDC - and came out of this holding $200 million worth of city property. We guess that in Peter Vallone's law enforcement world it's okay for someone to break the law and benefit handsomely - such is the state of good government in Queens if Vallone's view is representative.

Ben Haber has a more persuasive view of all of this - and lays it out in his letter to the Queens Chronicle. He deserves the last word, while Vallone has earned our ridicule:

"Term limits are now the law, but if Bloomberg wants to redeem himself on illegal lobbying, he should insist the City Council enact legislation withdrawing its approval of his Willets Point plan, and the process should start anew without illegal lobbying. Should he fail to do so, the City Council and Speaker Christine Quinn, who aspires to be mayor, should do so on their own.

The public is entitled to the fresh air of good and honest government and nothing less."

Wednesday, July 11, 2012

Claire Shulman and the Badge of Fraud

The Greenpoint Star editorializes on the impact of the AG's decision to chastise EDC and Claire Shulman's LDC for illegally lobbying-and in doing so unearths another example of the intrinsic dishonesty of Shulman's phony development corporation:

"At Willets Point, the corporation was formed in direct consultation with the mayor's office, and then stayed in contact with EDC throughout its lobbying efforts. At Coney Island, the corporation actually operated out of EDC's Manhattan offices and was made up of agency staff.Both portrayed themselves as grass-roots movements pushing for positive development in their respective communities, but instead were actually working at the behest and with the input of the city on huge, far-reaching projects the Bloomberg administration wanted to realize."

But Shulman at every point-and this is what prosecutors refer to as a badge of fraud-denied or hid her connection to the city. As the Greenpoint paper points out:

"In the case of Willets Point, one of the major players in the Flushing-Willets Point Corona Local Development Corporation is former borough president Claire Shulman, who made the rounds in Queens, including a stop at this paper, pushing the redevelopment of Willets Point.She presented herself and her group as independent, and that the Willets Point plan being proposed by the city was the best thing for Queens. While she may truly believe that, in the interest of full disclosure she should have noted that her group was created in conjunction with the EDC and worked closely with them, so of course supported the project.

She presented herself and her group as independent!-when in fact she was simply a puppet on a string. And she did the same thing with the New York State Authorities Budget Office, telling the agency that her LDC was not in any way a municipal entity and subject to the requirements of the freedom of information act. Shulman also played a consistent double game with her requirement to register as a lobbyist-and hid the lobbying purposes of the LDC from the IRS-and from the city clerk for as long as she could get away with it.

Claire Shulman and her group have been dishonest about who they are and what they represent-and what the Greenpoint Star misses is that, at the same time they were doing the city's bidding, they were lining up chits for their developer members. And the biggest chit-or chip in this case-was cashed in by Sterling Equities when they received $200 million in city property free of charge.

Courier Brings Bad EDC/LDC News

The Queens Courier follows up on last week's reporting of the attorney general's smack down of the illegal lobbying of EDC/Shulman's LDC:

"Three city development corporations have admitted to illegally lobbying the City Council to win approval of their favored projects, including a much-contested plan to revamp Willets Point, the state attorney general said...The projects require City Council approvals pursuant to the state’s Uniform Land Use Review Procedure (ULURP). But local development corporations (LDCs) are barred by statute from influencing legislation.

“These local development corporations flouted the law by lobbying elected officials, both directly and through third parties,” Schneiderman said."

The Courier also reports on Comptroller Liu's insistence that heads need to roll: "Meanwhile, the mild rebuke from the state is drawing heat from the city comptroller, who said the restructuring alone is insufficient and pushed for organization officials to be held accountable.“While these revelations of illegal lobbying are alarming, we cannot say that they come as a surprise,” said Comptroller John Liu. “For some time, this mayor has been using the EDC to create ‘astroturf’ groups to support his agenda, reward allies and dole out welfare to wealthy corporations.”

Astroturf indeed, since the Shulman group is the Potemkin Village of grass roots lobbying campaigns since her members were for the most part rich real estate firms hiding behind the group's not-for-profit status-and Liu's comments about "welfare" to wealthy corporations is right on since Sterling Equities has been handed $200 million worth of free land to build a mall next to CitiField.

This scam-because what else can you call it?-was at our expense-and the Courier quotes our statement:

"Willets Point United members said the investigation confirms their original suspicions that the entire land use review process was based on fraudulent and illegal behavior. They urged the city to end all recent and future actions regarding the area’s development.

“Our properties were put at risk by an illegal scheme, and we were forced to spend hundreds of thousands of dollars to protect our constitutionally protected rights against a municipality and its front group engaged in activities that were rife with fraud,” the group said in a statement."

The story was not without a bit of black humor from the LDC's attorney Bob Bishop-the same lawyer who repeatedly claimed, falsely as it turned out, that what the LDC was doing, meeting with elected officials and writing them memos of support, was not lobbying:

"Robert Bishop, a lawyer representing FWCLDC, said the group also plans to comply with the new agreement.“The LDC is a great organization that does great things, and we will continue to do great things,” he said."

Well, he sure is write about that, isn't he? That is, if your definition of great is snatching public property at no cost for the use of one of the LDC's charter members.

Tuesday, July 10, 2012

Liu Wimping Out?

In this morning's Crain's Insider (subsc. only) the newsletter reports that Comptroller Liu is reluctant to point a finger at EDC's Seth Pinsky when he says that people need to be held accountable for the agency's illegal lobbying:

Liu Won't Point Fingers at Pinsky

Comptroller John Liu had some harsh words for the city's Economic Development Corp., which admitted to illegally lobbying the City Council on Willets Point. But he stopped short of directly implicating EDC President Seth Pinsky. "We are saying the mayor needs to hold those responsible for this accountable. Who is up to the mayor," a spokesman said. "We are simply saying that there has been no accountability." In a letter, Liu also called on the mayor to make the agency's finances available on the comptroller's Checkbook NYC online database."

Come on John, man up here. As always the fish stinks from the head-as we have already pointed out:

"But undermine the law he did-and now he must be replaced because the illegal scheme at Willets Point falls on his shoulders, even though it was Dan Doctoroff that hatched the idea in the first place. Which elected official will be first to call for Pinsky's head?"