May 8, 2008
Editorial, NY TIMES

At Tammany ... Err ... City Hall

The legendary George Washington Plunkitt, who proudly labeled his brand of politics “honest graft” almost a century ago, would certainly recognize the scene these days in New York City Hall. City Council members have been in revolt, aghast that Speaker Christine Quinn dared to try to make them account for the way they toss around public money. Some were so angry that they wanted to toss Ms. Quinn out of the top council job.

So on Wednesday, she produced a revised reform package for how the Council passes around $200 million of “initiatives” or “member items” — money given to them to dispense with too little accountability or transparency. We hope the new proposal passes the City Council. Certainly, Ms. Quinn should keep her post.

But the Council needs to remember two things: This is not their money, and Ms. Quinn’s changes are just a start. They do not pass muster as real reform.

In the past few weeks, details of how this money has been used and misused have shocked many New Yorkers. There were phantom accounts in the city budget, holding pens full of dollars set aside for handing out in case of emergencies. After federal and city investigations moved into full swing, two aides to a Brooklyn councilman have been charged with embezzlement. Almost a dozen council members admitted on disclosure forms that at least some of their allotments went to groups connected to staff, political allies or even family.

One glaring weakness in the compromise reform presented by Ms. Quinn is that it still allows a council member to funnel money to an organization with personal or political connections. The new rules would require disclosure of this conflict of interest, but giving public money to organizations that employ political associates or family should be taboo. Period.

Ms. Quinn’s proposals have some good points. A searchable database of the city’s grants would be created to go on the Web, designed to feature these forms that reveal conflicts of interest.

Ms. Quinn is also pushing for an independent compliance officer to ensure that council members and recipients of their largess follow the increasing number of new rules. And the city agencies, plus the mayor’s office of contracts, will also review grants for more than $10,000, which is more than they do now.

Still, these are small fixes to a big problem. The best reform would be to simply get rid of these “member items” and other fiscal bonbons that city politicians like to parcel out in their neighborhoods. All city money should go through the regular budgeting process, with its checks and balances.

City Council members like to argue that the slush fund is spent on worthy causes. As it turns out, that is not always true. Ms. Quinn’s reforms are a good stopgap but ending the whole charade is the only answer.

May 1, 2008
Brooklyn Councilman’s Funds for a Group He Founded Were Blocked
By RAY RIVERA, NY TIMES

The first chance he had to spend the discretionary funds that City Council members control, Mathieu Eugene directed $45,000 last year to a nonprofit Brooklyn group that was close to his heart: a youth sports and mentoring program he had founded and headed until his election.

The fact that Mr. Eugene had run the group, Youth for Education and Sports, was no secret. It had been widely reported during his election campaign last year.

But the city’s Department of Youth and Community Development refused to approve the spending last fall and recommended canceling all its contracts with the group.

The city’s auditors expressed concern about the group’s performance on prior contracts and criticized the way it kept its records, including its inability to produce timesheets for one of the employees, Mr. Eugene’s brother.

At least some of the matters of concern appear to have surfaced during the time Mr. Eugene was running the organization, which has provided karate, basketball, mentoring, after-school and weekend programs to young people in central Brooklyn.

Mr. Eugene says that while he was in charge, it was a worthwhile agency without problems, one he felt committed to support as a council member.

Mr. Eugene’s allocation, however, underscores the wide discretion that council members have in financing programs with which they have deep and longstanding ties.

In disclosure forms released this week, more than a dozen council members acknowledged channeling money last year to community organizations where they or a relative had a connection. City and federal investigators are now reviewing those spending decisions to determine the extent to which city money has been squandered on organizations whose primary appeal has been a council member’s ties to the group.

The inquiry has led to charges against two Council aides who were accused of embezzling at least $145,000 in city funds that Councilman Kendall Stewart directed to a nonprofit agency run by his chief of staff.

No council members, including Mr. Stewart, have been implicated in any wrongdoing.

Mr. Eugene founded the youth mentoring group more than a decade ago. He was its executive director through nearly all of its history, during which time it has received nearly $500,000 in city contracts.

Alin Jean, the former chairman of the group’s board, said Mr. Eugene had done a good job while with the group. “If some kids didn’t end up in jail or the cemetery,” Mr. Jean said, “it was because of that program.”

Mr. Eugene’s brother, Maxi, also worked for the group, although Mr. Eugene said his brother left when he did last year.

A sign on the exterior of the group’s former headquarters at 681 Ocean Avenue designates it as the community center for Youth for Education and Sports. Maxi Eugene had an insurance and tax preparation business, and a separate sign reads “Liberty Multiple Services,” and lists his phone number as well as the phone number for the youth organization.

Asked about the sign, the council member said he did not recall it but said that the youth group sometimes donated space to other organizations. Told that the phone number was that of his brother, Mr. Eugene said: “But he was not running it inside the office. I remember that; there was a sign but he was not running it there.”

His brother, a licensed insurance broker, did not return several calls seeking comment. Other members of the youth group’s board said they did not think Mr. Eugene had run his business out of their offices.

On its latest Internal Revenue Service filings, which cover 2005, Youth for Education and Sports reported paying Mathieu Eugene $10,921 in salary and spending $12,790 for salaries and wages for others. It also paid $10,538 for unspecified consultants.

Mr. Eugene listed the youth group as his only source of income in 2006 in a financial disclosure form filed with the city’s Conflicts of Interest Board. Though he was trained as a doctor, Mr. Eugene, who is originally from Haiti, is not licensed to practice medicine in the United States.

Mr. Eugene took his seat after two special elections, during which other candidates questioned whether he lived in the district. Once he won the second election, last April, one of his first responsibilities as a council member was to decide how to apportion his discretionary spending.

He put $45,000 toward Youth for Education and Sports, and $13,500 was allocated by other Brooklyn council members. Mr. Eugene said that, as a precaution, he sought and received verbal clearance from the Conflicts of Interest Board to finance his former organization.

But in September, the city’s youth department said it was canceling the group’s contracts and would not approve the new allocations. The agency said in a memo to the Council that it was concerned with the group’s performance over the prior year despite “numerous technical assistance efforts.”

During an unannounced visit to the group’s offices in August, city officials said they had also found more potential problems with record keeping. For example, the memo said the new executive director, James Belabre, was unable to produce any personnel records because he said he did not have a key to the filing cabinet that day.

The department also noted that the group appeared to be charging a monthly fee of $30 to $60 for services, in violation of its city contract. Mr. Belabre, who had worked as an administrative assistant under Mr. Eugene before replacing him as executive director, said in an interview that the fees were optional for people who wished to contribute to the group.

Councilman Eugene said on Wednesday night that the group had functioned well during his tenure. He said he was still being stopped on the street by people asking about it.

“It provided services to many children and their parents,” he said. “What this organization has provided cannot be counted in the amount of money it received.”

Russ Buettner contributed reporting.

Council Speaker Quinn gave to nonprofit - & she got 16G
BY TINA MOORE and FRANK LOMBARDI, DAILY NEWS STAFF WRITERS
Thursday, May 1st 2008, 4:00 AM

Speaker Christine Quinn was one of 14 City Council members who sponsored $260,000 in "discretionary funds" for the Hetrick-Martin Institute last year.

But only she got some $16,000 in campaign donations from its board members - 16 times more than the combined amount received by other co-sponsors.

Current and former Hetrick-Martin board members - including Quinn's partner, Kim Catullo - gave Quinn $16,025 in campaign donations between May 2007 and Jan. 11, records show.

Catullo, a lawyer who lives with Quinn in Chelsea, kicked in $4,950. Catullo referred all questions to Quinn's office.

Last year, Quinn disclosed Catullo's unpaid position on the nonprofit's board to city conflict-of-interest officials.

She told reporters yesterday she sought "extra guidance" from the Council's lawyers about Catullo.

"They gave out the guidance that it was fine as long I continued to disclose," Quinn explained.

Misuse of Council "discretionary funding" is at the heart of a growing probe by the city Department of Investigation and the Manhattan U.S. attorney. Yesterday, Quinn emphasized, "I am not a target of the investigation."

Hetrick-Martin board members who gave to Quinn include Scott Cooper ($5,450), Michael Longacre ($3,000) and Thomas Koveleskie ($125). Ross Hamachek, the board's treasurer, contributed $2,000 to Quinn, and former board member Catherine Pino gave Quinn $500.

Quinn campaign consultant Mark Guma said Quinn "received a handful of contributions from LGBT [lesbian, gay, bisexual and transgender] leaders, some of whom are longtime personal friends, who serve as volunteer board members to one of the nation's most respected organizations serving LGBT youth - an organization that has been funded by the city for more than a decade. She's proud to have their support."

He noted the $16,000 was a small part of the $2.4 million Quinn has raised.

Two other Council members who co-sponsored fiscal 2008 funding for Hetrick-Martin received contributions from a Hetrick-Martin board member.

Catullo gave Councilwoman Jessica Lappin $750 and Councilwoman Rosie Mendez $150 in 2004 and 2005.

Thomas Krever, Hetrick-Martin's director, wouldn't comment on campaign contributions, but insisted the institute provides programs with "integrity."

The 2008 funds were used for after-school programs, Krever said.

"We're really proud of the work we do," Krever said. "We're saving lives."

The Hetrick-Martin Institute, which supports a city school for gay and lesbian students, has received more than $800,000 from the City Council since fiscal 2006.

tmoore@nydailynews.com

April 30, 2008, 12:23 pm
Two Politicians in Queens Bring Baggage to a Rematch
By Jonathan P. Hicks, NY TIMES City Room

The last few weeks have caused some sharp discomfort for a number of City Council because of the widening inquiries into how some council members spend their discretionary money. The uneasiness is amplified by the fact that many of the council members are contemplating running for other political offices.
Take the case of Councilman Hiram Monserrate, of Queens, who is considered to be planning a second challenge against State Senator John D. Sabini.

Two years ago, Mr. Monserrate lost the Democratic primary to Mr. Sabini, but by fewer than 250 votes. It was one of the slimmest victory margins for any incumbent in the state in 2006.

Hiram MonserrateBut this week came the revelation that Mr. Monserrate has supplied more than $400,000 in city funds in recent years to a nonprofit agency that has been run by some of his closest aides, and whose financial records have devolved into what its current director characterized as a “mess.”
An aide to Mr. Monserrate explained that the councilman had believed that the agency, Libre, had fully kept up with its bookkeeping and its tax filings. Nonetheless, it is an embarrassing disclosure at a time that Mr. Monserrate should be focusing on campaigning.
Mr. Monserrate has not returned calls asking for comment regarding his political plans.
So far, Mr. Monserrate has made no official announcement; two years ago, he did not make his candidacy official until June. But many politicians in Queens are expecting him to run, including Mr. Sabini.
“My assumption is that he will run,” Mr. Sabani said in an interview today. “In the last election we didn’t know that he would be running until late in the game. But I assume he will this time. He’s a formidable opponent and has shown an ability to get votes. I view anyone who gets on the ballot as someone to reckon with.”
Of course, Mr. Sabini has had his share of unflattering news stories. In the last year, Mr. Sabini was arrested in Albany and charged with driving while intoxicated. The senator pleaded guilty to a reduced charge and paid a $300 fine.
Despite the current attention to Mr. Monserrate and the nonprofit agency, most Queens Democratic officials say that a rematch between the councilman and the senator will surely be a hotly contested one. It will again pit two elected officials with high name recognition in the borough against one another. Moreover, it could become an ethnically charged race in an area of Queens whose Hispanic population has grown significantly.
“It’s not like Hiram was arrested or charged with anything,” said one Queens legislator, who did not want to be identified and who did not want to appear to offend either Mr. Monserrate or Mr. Sabini. “But it’s not the kind of story you want to have people talking about when you’re trying to win votes.”

April 23, 2008, 12:27 pm
Council Indictments Overshadow a Senate Bid
By Jonathan P. Hicks
LINK

City Councilman Kendall Stewart, who is challenging Senator Parker’s re-election. (Photo: Mike Appleton for The New York Times)The embezzlement accusation involving two City Council aides is finding its way into the politics of Brooklyn in the latest round of what is becoming a hotly competitive race for a State Senate seat.
The issue involved the indictment of two aides to City Councilman Kendall Stewart, a Brooklyn Democrat, who are charged embezzling at least $145,000 in city funds and sending some of the money to relatives in Jamaica.
Mr. Stewart is now running against the incumbent, State Senator Kevin S. Parker, in a district that covers Flatbush, East Flatbush and Midwood. In an interview this week, Mr. Parker said the indictments indicated that, at the very least, Mr. Stewart has been inattentive in the details of overseeing his staff members.
“At best, he was incompetent in managing his staff and overseeing the resources under his influence,” Mr. Parker said. “At worst, he was culpable in a deeper way. We’ll have to see how this plays out.”
When asked whether the issue of the indictments should resonate with voters, Mr. Parker said: “I think it’s a viable issue, yes. It’s a breach of trust. The people of his Council district entrusted him with a public office and he has breeched that trust.”
Mr. Stewart said that Senator Parker is merely trying to capitalize on the trouble of two Council aides to score political points in an election in which he considers Mr. Parker to be vulnerable.
“He’s going to try to get mileage out of this, simply because he has nothing to show what he’s done in all the years he’s been in office,” Mr. Stewart said of the man he is challenging in this year’s Democratic primary. “If you look in his State Senate district, he has nothing to show for his time in office. So, they only thing he can do is to associate me with this situation.”
Mr. Stewart said the only people who might associate him with the accusations against his aides are “people who don’t understand how government works.” He said that he had no role in misdirecting any funds intended for community organizations.
Of his staff members, he said: “I can’t tell people what to do every hour of the day. That’s not my job. My job is to bring funds to community organizations in my district. And it’s the mayor’s side of city government that determines the fitness and qualifications of those organizations.”
It is just the latest in a long history of the councilman and the senator taking shots at each other, usually over charges of incompetence and their respective problems with less-than-flattering news stories.
Mr. Parker was in the news a few years ago, when the senator was arrested after punching a traffic agent in the face as the agent was writing a summons for the senator’s double-parked car, the police said.
The challenge by Mr. Stewart is expected to be a competitive one. The councilman has been elected twice in a district that is a significant part of the State Senate district. Also, many Brooklyn Democratic leaders say that Mr. Stewart, who was born in St. Vincent, might have wider appeal because the Senate district has a large Caribbean population (Mr. Parker is not of Caribbean descent).
This week, Mr. Parker stopped short of calling for the councilman to drop out of the race. (Mr. Stewart was elected to the Council in 2001 and cannot run for re-election to that seat in 2009 because of term limits.)
“I can’t possibly advise him on whether to drop out,” Mr. Parker said. “Either his conscience or the United States attorney will be his guide on that one.”

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