Sunday, April 12, 2009

Bloomberg Update: Fire and Ice (Part II)

This is Part II of an article (click here for Part I) consolidating recent updates about Mayor Michael Bloomberg’s abuse of his increased wealth and contributions to charities for political purposes and how the campaign for mayor is therefore progressing.

We left off in Part I describing Mr. Bloomberg campaign to remind nonprofits of the ways in which they may be beholden to him, describes how Bloomberg is vastly outspending opponents and his unchecked dedication to eliminating opponents and we also noted how updates respecting Mr. Bloomberg’s wealth that seem to have gone unnoticed by the press.

In Part II we will be providing updates about conflicts of interest and qui pro quo-ing concerns with respect to the Bloomberg administration and prices everyone should be concerned that the city will have to pay.

Update on Bloomberg’s Qui Pro Quo-ing: Bloomberg Turns to Blagojevich's Ex-Deputy

As we have written before, Bloomberg has always employed his vast PR resources to perpetuate the manufactured myth of his munificence, the idea that he is not interested in the staggering wealth he keeps accreting from the private business in which he still participates while being mayor and that he is not interested in power. In fact, he seems more than a little preoccupied with both and that gives rise to substantial concerns about the kind of qui pro quo-ing in which he uses his vast resources to engage. For more background on this we refer you again to our comprehensive earlier article: The Good News IS the Bad News: Thanks A lot for Mayor Bloomberg’s “Charity.” (Monday, February 2, 2009). For something shorter and more focused see: Are the Atlantic Yards Land Grab and City Official Fraud Being Used to Finance Bloomberg’s Bid for Billionaire Term Limit Exceptionalism? (Wednesday, October 22, 2008).

For the most recent update on how hot and heavy the quid pro quo concerns are with respect to the Bloomberg administration consider this. Wayne Barrett came out with an important new Village Voice article in March relating to concerns about politicians that quid pro quo. (See: Bloomberg Turns Over His Next Campaign to Blagojevich's Ex-Deputy, by Wayne Barrett, March 10th 2009.)

In December Mike Bloomberg named Bradley Tusk to run his re-election campaign. Tusk's main credentials were four years as indicted Illinois Governor Ron Blagojevich's top aide. Bloomberg has guts because at the time Tusk was hired word was already out about Blagojevich: Barrett points out Blagojevich “had been arrested just three days earlier.”

Who is Bradley Tusk? According to Barrett:

The Chicago Sun-Times compared Tusk to Karl Rove, the Tribune called him "the center of gravity," Crain's said he was "as inside as you can get," and Republican State Senator Kirk Dillard called him a "junkyard dog protector of the governor" with "immense power and influence."
What kind of things did Bradley Tusk do for Blagojevich?

. . . . the Voice has obtained a copy of his June 22, 2006, interview with the state's Auditor General, William Holland, which establishes his culpability for a flu vaccine program that the state itself conceded, when sued by an unpaid vendor, was illegal.

* * * *
. . . the impeachment report formally charged Blagojevich with running two Tusk-conceived-and-directed programs—the flu vaccine and the importation of Canadian drugs—that "violated" numerous federal and state laws and, in the case of the importation effort, "exposed" participants "to federal criminal sanctions." The report names Tusk, concluding that the vaccine program, which it said was executed in "utter disregard" of the law, "implicates the highest-ranking officials in the Governor's Office, including the Deputy Governor."
Apparently subpoenaing Tusk winds up being critically intertwined with, and important to, ongoing investigations, both the one being conducted by U.S. Attorney Patrick Fitzgerald and the impeachment inquiry. This is not because Tusk is offering help to the investigation.

One certainly would like to hope (how credibly?) that Blagojevich-style government can be kept from happening here in New York and one would like to hope that Bloomberg’s hiring of Tusk is not an attempt to graft refinements of the Chicago/Illinois style on top of our already questionable New York ways. The New York Times recent front page story about the Blagojevich Indictment makes clear how much qui pro quo-ing was going on in the Blagojevich administration. (See: Blagojevich Indictment Lays Out ‘Enterprise’ of Corruption ...Print Headline: Blagojevich Indictment Lays Out Broad ‘Enterprise’ of Corruption, By Monica Davey and Susan Saulny, April 2, 2009.)

Rod R. Blagojevich, the ousted governor of Illinois, used his chance to fill the Senate seat vacated by Barack Obama as one more money-making plan in a vast racketeering scheme, federal prosecutors said Thursday, an operation they portrayed as the “Blagojevich Enterprise.”

In a 19-count indictment, prosecutors said the “primary purpose of the Blagojevich Enterprise was to exercise and preserve power over the government of the State of Illinois for the financial and political benefit of” Mr. Blagojevich, his family and his friends.

* * * *

The indictment lays out a broad pattern of corruption spanning from before Mr. Blagojevich was elected governor in 2002 to the day of his arrest, Dec. 9. He used his official position, the indictment suggested, to seek financial gain in nearly every element of government work, from picking members of state commissions to signing legislation.

Mr. Blagojevich sought a return on deals to give money to a hospital, to approve legislation helpful to racetrack owners, to pick a particular candidate to fill the Senate seat and, according to the indictment, from a United States representative who was pressing for a $2 million grant for a publicly supported school.
And the Times described how dispensation of government benefit was used to leverage political support. In 2006 when then Congressman Rahm Emanuel:

. . . was making inquiries about the status of state grant money intended for the school, Mr. Blagojevich sent a message that a brother of the representative (apparently, officials said, Ari Emanuel, an agent in Hollywood) needed to have a fund-raiser for Mr. Blagojevich, the indictment says. Mr. Blagojevich told an employee not to release the grant money, already in the state’s budget, until the governor gave further notice. According to the indictment, the fund-raiser never occurred.
Barrett’s story reports denials by the Bloomberg administration that Tusk was involved in the activities for which Blagojevich was indicted though the denials preceded release to the public of important information which, in retrospect, make one wonder even more. By contrast, Barrett provides a detailed and intricate account of Tusk’s apparent involvement in such Blagojevich interactions, including situations where Tusk, on behalf of Blagojevich, was interacting with the Bloomberg administration, including on the aforementioned flu vaccine matter and public awards of corporate sponsorships to beverage companies. (Bloomberg’s contract with Snapple gets an interesting, if possibly innocuous, passing mention.) Clearly the public was short-changed by Blagojevich. We must refer you to the Barrett article to make up your own mind on the full extent of Mr. Tusk’s involvement.

BTW: The Times has reported very little about Mr. Tusk. It will be interesting to see if it continues to ignore the Tusk story. But the Times has reported that Tusk and Deputy Mayor Patricia Harris are apparently hanging out together. (See: March 30, 2009, Odds and Ends From a Weekend on the Trail, by Michael Barbaro.)

For an interesting take on what the Blagojevich and Bloomberg administrations have in common in terms of manipulating media and editorial coverage by exercising control through the owners of city newspapers, we refer to an interesting Atlantic Yards Report article (Wednesday, December 10, 2008, The Illinois governor pressured the Chicago Tribune; in New York, the mayor & Ratner have had much less trouble). That article incorporates some other choice quotes from an earlier Wayne Barrett article on Bloomberg. Coincidently, Blagojevich, like Bloomberg, also had a Chief of Staff by the last name of “Harris.” You can read about the dirty work this other Harris was assigned to do when (Blagojevich’s) Harris was directed to tell the Chicago Tribune owner and a Chicago Tribune representative that state financial assistance would be withheld unless members of the Chicago Tribune’s editorial board were fired, with the goal being for Blagojevich to get “editorial support” he was after. The Blagojevich instructions to be conveyed through Harris:

. . . fire all those [expletive] people, get ‘em the [expletive] out of there and get us some editorial support.
Gosh and Golly! A Bloomberg Administration Ethics Scandal: Why Does It Matter?

Having previously covered at length the serious large-scale conflicts of interest directly involving the mayor and his very top aides, we thought it was interesting when, just recently, the press covered a new Bloomberg administration ethics scandal involving New York City Finance Commissioner Martha E. Stark. Keeping things in perspective, Ms. Stark is, relatively speaking, a much lower level Bloomberg administration official. The story, involving a relatively small amount of money was also, by comparison, a small potatoes story.

Commissioner Stark got attention and had to resign from the board of a national real estate company because of the conflict of interest it presented. The conflict of interest was coyly referred to as a “distraction” by Ms. Stark. (See: City Finance Official Resigns Seat on a Developer’s Board, Citing Publicity, by Ralph Blumenthal and Jo Craven McGinty, March 15, 2009.)

Ms. Stark, whose annual salary is $190,000, was “paid her fees by the firm totaling more than $134,000 in 2006 and 2007.” According to the Times, Stark was on the board of the Tarragon Corporation and said:

. . . she had obtained official approval to serve as a director of the Tarragon Corporation, a publicly traded company with nearly 15,000 condominiums and town houses planned or under construction around the country, although none in New York City. But Mayor Michael R. Bloomberg said he first learned of the arrangement this weekend, when it was reported by The New York Post, and questioned whether his administration was appropriately informed.
Ms. Stark issued a written statement:

. . . announcing her resignation from the board: “Although it was cleared by the city’s Law Department and the Conflict of Interest Board prior to my agreeing to serve as a board member for Tarragon Corporation, and all income was fully and accurately reported to the appropriate oversight agencies, I do not want this issue to become a distraction from the work we do at the Department of Finance.”
Admittedly, being paid more than your public salary by a private company has its disquieting aspects and the story indicates that Ms Stark obtained her approval from the city Law Department with some information that did not, in fact, pan out to be exactly true: She informed the Law Department she would be partaking in “three or four meetings a year” rather than what turned out to be perhaps sixteen.

We have to wonder at the way that Ms. Stark was being made an example by an administration where far more serious conflicts of interests exist right at the top with the mayor. Ms. Stark apparently never had an actual conflict of interest and was never put to the test with a situation where she might have needed to recuse herself. If you refer to our prior article, Bloomberg has been presented with situations where he knew he was supposed to recuse himself and didn’t. In those situations the sums of money in play were truly appreciable and worthy of press attention.
In the case of Ms. Stark it was a question of receiving $134,000 for being one member on the board of a company that reportedly didn’t do business with the city. In the case of Mayor Bloomberg it is a question of owning and being involved in the operations of a company that has increased his personal wealth while mayor from perhaps $2 to $20 billion. As the Times put it, that company transacts business with “virtually every major financial institution in the city.” (The Roles Blur for the Mayor and the Mogul, By Serge F. Kovaleski and Ray Rivera, December 8, 2007.)

Ms. Stark, who was once proposed as a candidate for State Comptroller by Governor Spitzer has, however, been involved in other situations where her conduct has been questioned. In one case it was a question of what she let a top aide get away with and several thousand dollars were in issue. In another, concerning Yankee Stadium, it was a question of what she was enlisted to do at the probable behest of the mayor; involving multiple millions of dollars of benefit handed out by the Bloomberg administration.

We’ll start with the small stuff: Days after the story of Ms. Stark having to resign from the board of the real estate company, information surfaced that city investigators had warned Ms. Stark that the husband of her first deputy commissioner had, as a senior parking ticket judge, falsely billed “for office hours when he was not present.” (See: Parking Judge to Be Reassigned After Conflict-of-Interest Allegation, by Ralph Blumenthal and Jo Craven McGinty, March 17, 2009.) In essence, the parking judge was being supervised by his senior official wife.

Of all Ms. Stark’s conduct, the most significant questionable and perhaps illegal conduct involves something else: her participation in apparently manipulating an inflated real property assessment to support the issuance of tax-exempt bonds for Yankee Stadium. Ironically, this has received less coverage. For thorough coverage see Atlantic Yards Report. (Thursday, March 19, 2009, Under fire, Finance Commissioner Stark gives up moonlighting job; won't talk about conflict-of-interest situation and Saturday, October 25, 2008, Testy Kucinich presses city officials on “gaming” Yankee Stadium assessment; big disagreement over “smoking gun”.) See also our own: Does Questionable Assertion of Attorney-client Privilege Point to Yankee Stadium Bond Taxability? (Saturday, November 8, 2008).

The Bloomberg administration’s treatment of Ms. Stark, requiring her to resign from the real estate company’s board may seem disproportionate in light of everything else that goes on in the Bloomberg administration but it has its considered tactical advantages. In a shorthand fashion it telegraphs to the public that the administration is ethical, notwithstanding that this may only be serving as a distraction from the more serious issues of conduct in the administration. It is like the magician’s tactic of distracting with superfluousness the audience’s attention away from that which the magician does not want the audience to see.

It is likely that the decision to have Ms. Stark resign was made when administration officials guessed or gleaned that the investigation of her senior deputy supervising the time certifications of her own spouse was going to become public. They may have feared that one thing would lead to another as it so often does: This was then like creating a firebreak ahead of a brush fire. The Bloomberg administration would also appreciate that a small scale anecdote the public can readily understand is often more potent than more obscure issues that might be related. Consider, for instance, the AIG bonuses (understandable) vs AIG’s unnecessary 100% payout to banks like Goldman Sachs and Barclays (more important).* (See: Monday, March 30, 2009
Former AIG Executive’s Whereabouts: Quick Note on Scandal Follow-up Questions We Hope Are Being Asked.)

(* Note: For a quick read relevant to Bloomberg and the AIG bonuses see: Mayor Turns Suddenly Shy About Money, April 10, 2009 wherein Jim Dwyer pints out that Bloomberg, a key George W. Bush supporter, and one of very few Obama non-supporters, was in favor keeping AIG taxpayer-financed bonus information secret while at the same time in favor of inquisitioning New Yorkers who protested against the invasion of Iraq about their political beliefs and who they voted for in past elections.)

Silent Spring: A City Laid Waste, Its Earth Sown With Salt

We have a convenient symbolic update with which to wrap this all up. This brings us to the latest reporting by the Brooklyn Paper about a special Bloomberg pet project, The New York Waterfalls. We are not the only ones who think the New York Waterfalls are symbolic of Bloomberg. When Forbes, in September, reported the peak Bloomberg’s personal net wealth figure of $20 billion Forbes pasted into its report an image of Bloomberg standing in front of his Waterfalls. In a way, as we will explain momentarily, the subject of the Waterfalls will bring Noticing New York full circle in examining Mr. Bloomberg and his abuse of charities.

Last week the Brooklyn Paper ran an update on what it has referred to as the “killer waterfalls.” (See: Silent spring at the River Cafe thanks to Waterfalls project, By Aisha Gawad, April 1, 2009.)

As the paper noted, Olafur Eliasson’s “arborcidal artwork,” “New York City Waterfalls” appears to have inflicted “a lingering wound.”

One of the four salt-water-spewing behemoths from Eliasson’s public arts project
was situated directly under the Brooklyn side of the bridge. And on most days
over the course of the three-month, $15-million public art project, a brackish
mist lashed the River Cafe’s beloved trees.

All summer long, trees not only at the restaurant, but also near other Eliasson “waterfalls” along the Brooklyn Heights Promenade and on Governors Island, showed severe damage.

(Image from Brooklyn Paper story.)

With the arrival of spring, the paper is reporting that the damage may be permanent despite the fact that:

When the project’s taps were finally tightened, tree experts hoped that the
foliage would bounce back. But it has been a silent spring, so far, at the River

We commented on the Brooklyn Paper’s website (and the same appeared as a letter to the editor in the print edition- click image to enlarge) that this story should have made a least some reference to Mayor Michael Bloomberg who masterminded the Waterfalls as a pet project, including diverting $2 million in 9/11 disaster recovery money for its funding. He led and directed almost all the $15.5 million in funding for it and then gave his pet project a (self-congratulatory) city award notwithstanding the damage it did.

It was probably because of Bloomberg’s involvement that there wasn’t an environmental impact statement or assessment ahead of time sufficient to identify the damage that was likely.

In addition to the diverted disaster recovery money, funding came from Bloomberg’s private “charity”and from a City Hall “charity” Bloomberg controls by being mayor and then from a long list of mostly real estate industry interests like Atlantic Yards developer Forest City Ratner who benefit terrifically from discretionary decisions made by the Bloomberg administration.

The kicker is that the recipient of all this money, Susan Freedman, president of the Public Art Fund, appeared to testify in support of the Bloomberg-proposed special extension of term limits.
(Image above from our "Befalls" piece.)

We are coming full circle here because it was the Waterfalls that first got us thinking about Bloomberg’s abuse of charities. We put our initial thoughts into the article: Self-Congratulation “Befalls” a Man Who Would Know No Limits (Wednesday, October 15, 2008).

Immediately thereafter, in a front page article about Bloomberg’s abuse of charities for political purposes, the New York Times reported on testimony by Susan Freedman, president of the Public Art Fund, in support of the Bloomberg-proposed special extension of term limits. The Brooklyn Paper also had previously run important stories about the abuse of charities for political purposes. We followed up with more thoughts. (See: For more about how all these stories interweave see: Monday, October 20, 2008 “Charity?” We Begin to Groan.)

Bloomberg as Salt of the Earth

Salting of the earth to prevent crops from growing was something once done to an enemy’s land so that the enemy might be totally vanquished. In modern times it often used as a metaphor to connote excess by the victoriously powerful. The symbol now recasts itself. The salted barren earth Bloomberg’s self-important pet project has left behind seems a fitting symbol of the Bloomberg administration’s stripping of the public realm. We have, of course, mentioned before the many holes in the urban fabric the Bloomberg administration is creating, like Atlantic Yards and Coney Island. Bloomberg is so often distracted by the grand scheme that leaves the city poorer in the end. Not many days ago we were talking with a knowledgeable, involved real estate professional about the Queens West delays that ensued from the Bloomberg administration’s preoccupation with its 2012 Olympic bid. Without that distraction, Queens West might be much further along than it is now and perhaps a better project. And speaking of that Olympics bid, thank heavens that Bloomberg’s West Side stadium never happened.

The West Side stadium never happened, but a third term for Bloomberg will be an opportunity for more serious mischief and mayhem across the city. We are not likely to escape unscathed. For a litany of what selling off of the public realm consists of see: Un-funny Valentines Arriving Late: Your Community Interests at Heart (Monday, February 23, 2009). That litany though is probably far from complete.

Let there be no secret then that we believe that the city desperately needs a change in administration. The only problem is that with the totally absurd wealth Bloomberg has at his disposal whether he will ever allow the natural process by which that change ought to come about.

1 comment:

Bob said...

Thank you very much for writing this. Like yourself, I would like to see Bloomberg defeated in November. I hope it is possible. But have the potential candidates like Tony Avela or William Thompson taken adventage or paid attention to all the discontent that people in the city feel? Will either of them step up and challenge the Mayor openly at this point? I hope something can be done.