New York City Council Member Indicted for Misuse of Slush Fund, But He Was Enabled by Many Other Officials
It's been almost two years since the <a href="http://www.nytimes.com/2008/04/28/nyregion/28council.html" target="”_blank”">New
York <i>Times</i> broke the story</a> on the abuses of New York City council
earmarks slush fund, which totaled about $50 million a year. This week, the
council member featured in the <i>Times</i> article was expelled from the
state senate for a violent act committed against his female companion,
according to <a href="http://www.nytimes.com/2010/02/10/nyregion/10hiram.html" target="”_blank”">an
article in yesterday's <i>Times</i></a>. And according to <a href="http://www.nytimes.com/2010/02/10/nyregion/10seabrook.html" target="”_blank”">a
<i>Times</i> article today</a>, another council member was indicted by a
federal grand jury for much the same sort of conduct. Not the violence,
but the misuse of council earmarks to help himself and his family,
which included charges of money laundering, extortion, and fraud.<br>
<br>
But unlike the violent council member, this one was enabled by hundreds of elected and appointed city officials.<br>
<br>
It's another textbook example of misuse of office. As always,
nonprofits were used as front organizations (why don't politicians get
creative and try pizza parlors, for a change?). According to the
charges, the council member controlled the nonprofits, helped them win
city contracts, and paid salaries to his brother, two sisters, other
family members and, of course, his female companion.<br>
<br>
The council member directed $1 million to the nonprofits, and never
disclosed his relationship with them. He extorted money from a close
associate relating to a city contract for boilers at the new Yankee
Stadium. And there's even a $177 bagel (the receipt was fraudulently
changed from $7) among the $200,000 in fraudulent billing of the city
by the nonprofit groups.<br>
<br>
But more important than the council member's misuse of office was
everything that allowed him to do what he did. Putting all that money
into the hands of elected officials was wrong to begin with. But it was
done without transparency and without effective oversight ("Even after
one of the nonprofit groups was flagged by city auditors for
financial impropriety [the council member] 'found ways to dodge
scrutiny and keep the money flowing.'").<br>
<br>
Even when the council president tried to end the earmark program, it
wouldn't die. But it's not clear whether the program was a zombie or
instead every government official who sat there and let the program be
created and continue. Everyone knew it could come to no good. Everyone
knew that there should have been careful scrutiny of every dollar
billed and of who was getting paid. If there were any integrity among the leaders of the city
government, the ones most responsible, including the city council
president, would have offered their resignations two years ago.<br>
<br>
But enablers of unethical and criminal conduct are not guilty, so why
should they feel guilty or act guilty? Hell, even the council member
says that he didn't do anything wrong. The former council member, the
one expelled from the state senate, says he's going to run in a special
election. So why should anyone admit to having been an enabler, of
showing that the fault for this sort of thing lies not just with officials
ready to take advantage of such a horrible, tempting program, but also with those who voted for
the program and who let it continue without making it transparent and accountable?<br>
<br>
Here are links to my other blog posts on the earmark program, all from
2008:<br>
<a href="http://www.cityethics.org/node/404" target="”_blank”">Transparency vs. Fear</a><br>
<a href="http://www.cityethics.org/node/422" target="”_blank”">Council Earmarks Create a
Serious Conflict of Interest Situation</a><br>
<a href="http://www.cityethics.org/node/429" target="”_blank”">The Conflicts of Slush
Funds</a><br>
<a href="http://www.cityethics.org/node/435" target="”_blank”">Form of Government Ethics
Issues</a><br>
<br>
Robert Wechsler<br>
Director of Research-Retired, City Ethics<br>
<br>
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