Monday, October 20, 2008

“Charity?” We Begin to Groan

Here are a few observations it is time to pull together.

NY Times Front Page: Bloomberg Using His Private Charities and City Money To Press for Third Term

Yesterday the New York Times had a front-page story (Bloomberg Enlists His Charities in Bid to Stay, by Michael Barbaro and David W. Chen), picking up on one of our own stories, about how Mayor/Billionaire Michael R. Bloomberg is using control over his “charitable” giving to press “many of the community, arts and neighborhood groups that rely on his private donations to make the case for his third term”. Notwithstanding the “His Charities” in the article’s headline, the article is about how Bloomberg has extraordinary leverage over the groups’ finances by using both:

1.) his “private” (read that as “secret” too) giving through his media company, Bloomberg, LP, and also
2.) our city money with contracts overseen by his city staff.

Follow-up on Original New York Times Story

The Times ran a follow-up today, (Criticism of Bloomberg Over Nonprofits’ Support, by Michael Barbaro) about a number of the city’s political figures' “harsh” denunciations of Michael R. Bloomberg’s administration for asking the nonprofit groups to support City Council legislation that would allow Mr. Bloomberg to seek a third term in office. The article added that the Bloomberg administration was also similarly coordinating support statements from union leaders. The article quoted Gene Russianoff, a senior lawyer for the New York Public Interest Research Group, as saying that asking groups who receive city money to support the term limits bill “looks like an administration desperately abusing its power to stay in office. It just does not pass the smell test.”

There was similar follow-up on WNYC today.

True Charity?

Isn’t it overdue that we notice how many ways this “charity” thing has gotten dangerously out of hand and that the “charity” we are seeing is in many ways not so real?

A quote worth considering:

"Those who give, hoping to be rewarded with honor, are not giving, they are bargaining"
Philo Judaeus
Christine Quinn’s Fake Charities and Term Limits

As nearly everyone knows, City Council Speaker Christine Quinn was embroiled in a messy political slush fund scandal a relatively short time ago. What was the instrument by which Quinn was busy illegally routing monies? Fake charities! (See: Quinn Raises Less Money Amid Inquiry Into Council, By David W. Chen, July 13, 2008).

Quinn was in the middle of running for mayor when she was caught in the scandal. We speculated, as the Times did later, that her imminent support for a repeal of term limits for Mr. Bloomberg was linked to the way her political prospects had been weakened by the fake charity scandal. In a story reporting on Quinn’s angst about reversing her decision to support Bloomberg’s continuation in office* (Quinn’s Silence on Term Limits May Reflect Conflict of Ambition and Past Stand, by Michael Barbaro, October 7, 2008.) the Times wrote:

Leading the effort to revise the current limits could be advantageous to Ms. Quinn, who was ensnared in a messy scandal this year involving Council budget appropriations for dozens of fictitious community groups. A third term in the Council could give her four years to put that embarrassment behind her.
*(We believe it was fairly clear that Bloomberg did not announce that he was going to pursue a repeal of term limits until after Quinn was on board, but officially her decision to reverse herself on term limits was played out after Bloomberg’s announcement, with the Times reporting in the above article the requisite stage-managed drama concerning how agonizing the decision was going to be for Ms. Quinn. Once Quinn was out with her position she started making the decisions of others on the issue difficult in another way: She is reportedly using City Council chairmanship assignments to manipulate the City Council vote. See: Quinn Targeting Term Foe's Plum, by Sally Goldenberg and David Seifman, October 15, 2008. The same story reports that Bloomberg defended her manipulations, saying: “Her job is to corral people and convince them to support legislation, . . .This is an administration-sponsored bill . . . Do you really want us to not go out and promote [it]?”)

Marty Markowitiz’s Not-So-Real Charities

How many steps removed from Christine Quinn’s fake charities are Marty Markowitiz’s “charities,” which are politically motivated and politically funded? The charities can be used as pseudo-campaign funds, but whereas there are limits to what companies can donate to politicians’ campaigns, there are no limits to what companies can donate to pet political charities used as pseudo-campaign funds. Further, Markowitz uses the charities to supplement the incomes of people working for him in non-charitable capacities. (Is there more we need to know about how and to whom charities are being used to pay salaries?)

Taxpayer Money

Markowitz also put taxpayer money directly into his “charities.” A New York Post editorial (Beeping Marty, October 13, 2008) notes that Markowitz’s directed “no-bid city contracts worth nearly $700,000 to” to one of his “charities,” Best of Brooklyn raised “the same questions as the City Council's nonprofit scandal earlier this year.” They were speaking of the aforementioned scandal involving Speaker Quinn. Even more taxpayer money was funneled in from City Hall by the Bloomberg administration. In a story appearing after the Post’s editorial (Sure Pays for Marty to Be Mike's Buddy, by Rich Calder, October 14, 2008) the Post reported that “Since 2003, the Bloomberg administration has handed out at least $2.7 million in taxpayer cash to three nonprofit groups Markowitz set up to fund "free" concerts and other pet projects, a Post investigation has found.” The Post says the amount the Bloomberg administration has given is between $2.4 million and $4.8 million of taxpayer dough over the last five years, and that Markowitz's groups also got between $544,724 and $834,724 from state agencies.

Money Back From Companies Doing Business With The City

The donations received from companies doing business with the city are difficult to distinguish from outright kickbacks, which is not to say they can or should be. Markowitz is famous for his irrational and unqualified support for Forest City Ratner’s Atlantic Yards megadevelopment. Because of Markowitz’s support, Atlantic Yards stands to get over $2 billion in taxpayer subsidies for the project, plus effect a 22-acre land grab with associated eminent domain abuse and zoning-override windfalls. It has now come to light that since 2003, when Atlantic Yards came into the picture, Markowitz’s “charities” have pulled in between $680,000 and $1,00,075 from various Ratner-affiliated companies and allies.

For the informed, it is pretty obvious that Atlantic Yards stands to have devastating effect on Brooklyn, yet Markowitz supports the megadevelopment unquestioningly. Atlantic Yards Report provided an excellent litany making it clear how indefensibly irrational Markowitz’s support is: Monday, October 13, 2008, Marty "bought and paid for"? Following up on the Post's scoop.

Even if these cannot be legally proven to be kickbacks, the same Post editorial mentioned above states that “the Markowitz-Ratner relationship appears to be evading city campaign-finance regulations.” Similarly, Markowitz saw his nonprofits get at least $170,000 in donations from the cruise ship industry when he helped convince the city to open a cruise ship terminal in Red Hook.

How Real?

Do the Markowitz charities exist other than for the purpose of politically self-serving artifice? Markowitz took office in the beginning of 2002. His principal charity, Best of Brooklyn, received its IRS ruling in 2002. The Brooklyn Paper reports that Markowitz’s Borough Hall spokeswoman said she is uncertain whether Markowitz would be involved with the charities after leaving political office and unclear whether the charities will even continue to exist after Markowitz leaves office. (See: Marty’$ borough haul, by Mike McLaughlin, The Brooklyn Paper, September 18, 2008.)

Markowitz’s three pet charities are: Best of Brooklyn, Inc., the Martin Luther King Concert Series and the Seaside Summer Concert Series.

Round and Round

These charity things keep going around in circles. The respective sponsorship pages for the Seaside Summer Concert Series and the Martin Luther King Concert Series say that they would like to acknowledge the outstanding support of: Mayor Michael Bloomberg (plus two of his deputy mayors) and Christine Quinn, NYC Council Speaker.

From Bloomberg, LP

Perhaps the charities should not just be thanking Bloomberg in his capacity as Mayor. Carolyn Greer, the director of public events in Markowitz’s Borough Hall, is a civil employee who gets salary beyond her civil salary from the Markowitz charities. According to Bloomberg, LP, Ms. Greer is the individual with whom the Mayor’s media company, Bloomberg LP, communicates in connection with its philanthropic donations to the Martin Luther King Concert Series and the Seaside Summer Concert Series. What those donation amounts might be is, as yet, unreported. When called by Noticing New York about how much money “private” Bloomberg, LP donates, Ms. Greer did not return phone calls.

More To Investigate?

This just in: In an editorial in today’s paper, the Post calls for an outside third party to investigate Markowitz’s charities. They suggest Brooklyn District Attorney Joel Hynes. See: Marty Markowitz's Millions.

How Real is Bloomberg’s Charity?

Back again to Speaker Christine Quinn, once upon a time the woman who would be Mayor. It would be ironic if, by virtue of being side-lined in her run for Mayor by a fake charity scandal, her support for Bloomberg’s attempt at another term creates an environment where Bloomberg’s own charities are themselves now perceived as scandalously less real.

Quinn’s path to the office of Mayor was going to be her close alliance with a popular mayor. Quinn’s support of Bloomberg now could be a very bad move that ends her political future. It is not clear that Bloomberg’s popularity would survive a possible third term, or that it will survive what is now coming to light about the motivations and uses associated with what was once considered his largess.

What Marty Markowitz engages in on small scale with his charities you see reflected on a much larger palette in the wealthy Bloomberg’s activities. Among other things, Bloomberg wears more hats.

Waterfalls as a Focus

In our original October 15th story observing how Bloomberg’s control over charitable giving seemed tied in with a general unwillingness to recognize limits, we focused on the many-sided lead Bloomberg took, adopting the New York City Waterfalls as an object of his attention. The less than completely successful New York City Waterfalls were the recipient of various sources of funds Bloomberg was able to direct to it in his multiple capacities. The Waterfalls are a project of the Public Art Fund. Our timing was apt given what happened the next day.

Public Art Fund Testimony: Not a Coincidence

Several hours after we posted our Waterfalls article, we were at the City Council hearing on term limits when Susan Freedman, president of the Public Art Fund, appeared to testify in support of the Bloomberg-proposed exception to term limits. (See: Friday, October 17, 2008, At the term limits hearing, AY opponents and supporters make their mark.) The front page New York Times story mentioned the Public Art Fund’s testimony supporting the Mayor’s cause twice. The first time, they cited the Public Art Fund amongst several other charitable organizations and observed that “None of the officials disclosed their financial ties to the mayor’s charity when they testified.” Then, mentioning Ms. Freedman’s testimony specifically, the Times reported that the Public Art Fund “has received more than $500,000 from Mr. Bloomberg.”

Private $ = Secret $

The “private” charitable giving that is being used to exert pressure is more insidious because it is “secret” and undisclosed. Part of my original story was about the difficulty in obtaining this information and bringing it to light. All of the following refused to inform Noticing New York how much money was donated by Bloomberg, LP to the Waterfalls: The Mayor’s Office, The Parks Department, Bloomberg, LP and the Public Arts Fund. While the New York Times reported that Bloomberg, LP donated a minimum of $500,000 to the Public Art Fund, it is still in question how great the Bloomberg donations actually are. Further, what the Times reported about the amount Michael Bloomberg directed to the Public Art Fund is only a fraction of the story.

Public Art Fund: Beyond $$ the Times Reported

As we noted in our earlier article, apart from what the Times reported, the Public Art Fund received a minimum of $2 million dollars in federal money that was channeled to it by the Lower Manhattan Development Corporation, half of whose board is appointed by Bloomberg. The LMDC, which manages the World Trade Center site redevelopment, was created after the 9/11 disaster to assist with the lower Manhattan recovery. It receives federal money (such as was passed on to the Waterfalls) intended for the ongoing disaster recovery efforts.

Moreover, while Bloomberg used his media company to be lead sponsor of the Waterfalls, he was doing the same thing with a City Hall-based charity that he controls, the Mayor's Fund to Advance New York City. The Mayor revved up the City Hall charity after coming into office. Both the Bloomberg, LP giving and the City Hall-controlled giving were characterized as “private” money, and both would have been at least in the same minimum amount. That minimum amount would be substantially above what other listed donors gave. Were we to assume that the minium amount for the lead sponsors of the Waterfalls was $500,000 (that could easily be low), it would mean that, by virtue of all of the above, Bloomberg has directed at least $3 million to the Public Art Fund, which would be several multiples of what the Times reported. Then there is the money I described coming from organizations doing business with the city. As noted above with respect to Mr. Markowitz, it is not so easy to distinguish these from kickbacks.

Information Please?

I contacted the City Hall-based Mayor's Fund to Advance New York City to find out how much the fund had donated to the Waterfalls. I was put in touch with Jason Post, the same Mayoral spokesperson who is handling press inquiries on the management of term limits. As of this time I have not been furnished with information about the amount. Meanwhile, I again contacted the Public Art Fund and inquired about the $500,000 figure the Times had obtained. The Public Art Fund refuses to confirm that the information in the Times about how much money the Public Art Fund has received was accurate. It was pointed out to me that the Times was not reporting a figure of how much was received by the PAF in connection with the Waterfalls. That would possibly be a subset of the total amount they might have received.

In addition to the “donated’ amounts described above that Bloomberg sent fairly directly to the Public Art Fund, there are appreciable additional amounts that went to the PAF from entities receiving substantial benefits and subsidies in dealings with the city. My earlier article goes into detail, noting that contributors of this ilk predominated among the “givers.”

Money Back From Companies Doing Business With the City

Bloomberg is in a very similar position to Marty Markowitz when it comes to the large donations that came in from Forest City Ratner. There are those who would say that Bloomberg’s continuing support for Atlantic Yards is no more logical than Markowitz’s, since his administration seems to have clearly acknowledged Atlantic Yards as a mistake. Once again. As with Markowitz, because of Bloomberg’s support Atlantic Yards stands to get over $2 billion in taxpayer subsidies for the project, plus effect a 22-acre land grab with associated eminent domain abuse and zoning-override windfalls.

Charities That Receive: Do They Do The Right Thing?

When donations with strings attached are offered to charities that are created to do good, can those charities be counted upon to the do the right thing? Or do charities that take money from those with a political agenda tend to fall under their sway? The Times article says that it is difficult for charities to do the right thing.

In Saturday’s Times article:

“It’s pretty hard to say no,” the official said, speaking on condition of anonymity for fear of upsetting the mayor. “They can take away a lot of resources.”
In today’s follow-up article:

Many of the organizations contacted by the administration rely on Mr. Bloomberg, a billionaire, for tens of thousands of dollars a year in private donations and millions in city contracts, making it difficult to turn down the request, these leaders said.
The Community Suffers

If these charities do the wrong thing, they do so at the expense of the citizenry. If the public has picked a method like referendum to make the decision on term limits and twice used it, public choice and process should not be overridden. Public process should not be infected by people who do not advocate their true and considered beliefs in hopes of collecting additional contributions.

We think that overturning term limits in the special self-serving way proposed by Bloomberg is wrong. Among other things, it is wrong to change the rules in the middle of this 2009 electoral cycle. The timing was last-minute, with the public being the last to know (long after real estate developers). If Bloomberg or the City Council wanted to change term limits, they missed the boat for doing it in this 2009 election cycle: They know the process; if it was ever going to start, it should properly have been started long ago.

Charities doing the wrong thing may pocket money for themselves, but the greater good of the community suffers.

What do charities selling out at the expense of the community look like? The Ratner organization’s donations in connection with both the Markowitz and Bloomberg charities have been cited as objectionable. Let’s stick with Ratner for one more example. Bruce Ratner's Forest City Ratner runs charities and donates money for questionable purposes, questionable because they are self-serving. The end goal of their activities is to make private, personal profit and Rater has a record of doing so at the expense of the public. For instance, the New York Observer reported an apparent result of a reported lobbying meeting that Bruce Ratner had with Mr. Bloomberg and Deputy Mayor Patricia Harris:

In December 2005, right as the debate over the Atlantic Yards complex was heating up and before the city made several crucial decisions about the project, Forest City Ratner gave between $450,000 and $1 million to a nonprofit closely associated with Mayor Michael Bloomberg.
Patricia Harris was responsible for coordinating charitable giving matters for Mayor Bloomberg.
(See: Forest City Ratner Gives to Coney Island Carousel, Other Bloombergian Public Projects by Matthew Schuerman, April 1, 2007)

Familiarity of a Quote: Ratner and the Brooklyn Museum

The Philo Judaeus quote at the beginning of this post may strike some as familiar: "Those who give, hoping to be rewarded with honor, are not giving, they are bargaining".

It was one of the quotes we offered at a community demonstration to admonish the Brooklyn Museum for the way it sorely wounded the communities of Brooklyn by inappropriately “honoring” Bruce Ratner in exchange for donations. The timing of the museum’s award was highly inappropriate since Ratner had an overriding goal of pushing through Atlantic Yards at substantial cost to the community and the rest of the public.

What did the Brooklyn Museum get from Ratner for this misadventure? Atlantic Yards Report reported about Ratner donating over $200,000 to the museum. (Thursday, April 03, 2008
How much has FCR given the Brooklyn Museum? At least $200,000, with more coming) There were also various conflicts of interest involving people on the Brooklyn Museum board which may have caused the museum to go off on the wrong track in the decision it made. Joanne Minieri, president of Forest City Ratner, was on the museum's board. (See: Thursday, March 13, 2008, At the Brooklyn Museum gala, honors for (and $ from) Bruce Ratner)

This is where we leave off writing this post, but if you want to read more about how far astray the judgement of nonprofit institutions can go when tempted with “donations,” read the letter of protest sent to the museum in connection with that event.

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