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Additional Information Means 'Ongoing Investigation' into Rivington Deal


BdB holds paper hearing

Mayor de Blasio (photo: Michael Appleton/Mayoral Photography Office)


A bureaucratic procedure gone wrong has turned out to be a major headache for Mayor Bill de Blasio that refuses to go away. Even after two recent and damning investigative reports, one city agency maintains its investigation is "ongoing" given newly turned over information and the state Attorney General is still looking into the matter.

The lifting of deed restrictions on Rivington House, a nursing home on the Lower East Side of Manhattan, which allowed the property owner to sell to a luxury condo developer at massive profit, has been scrutinized and criticized over the past several months. Mayor Bill de Blasio has admitted that his administration made a significant mistake, but there have been more questions than answers.

With allegations of impropriety swirling, de Blasio insisted that there was no inappropriate intent, only poor communication and an outdated deed restriction removal process. Two reports on the matter - one each from the city’s Department of Investigation and Comptroller Scott Stringer’s office - sought to answers some of the lingering questions and both painted a picture of City Hall mismanagement, though not criminality. A third investigation, by Attorney General Eric Schneiderman’s office, continues.

But while the DOI did release a report on the Rivington matter, that investigation featured condemnation of City Hall for redacting information and limiting access to computers. Now, after DOI threatened to sue and City Hall granted more access, DOI has indicated that it still has “an ongoing investigation,” according to a spokesperson for DOI, who declined to comment further.

The watchdog agency could issue a follow-up to its report given new information, which, it said in a press release upon receiving the unredacted documents, includes an essential de Blasio administration memo on the Rivington matter.

While DOI continues its Rivington investigation, the Comptroller’s office confirmed to Gotham Gazette that its report on the deal is final and that Comptroller Stringer has nothing else to add at this time.

The two reports mainly criticized City Hall for poor communication with city agencies and allowing the Rivington deal to go through without the proper checks and oversight that would have stopped such a transaction.

The DOI report, released July 14, found a stark absence of accountability in how the city deals with deed changes and a lack of vigilance among city officials who knew of the deal yet did little to ensure adequate public benefit. It stated that City Hall pleaded ignorance of the details despite having been informed at multiple occasions by agency subordinates.

The Comptroller’s report from August 1 was more pointed in assigning blame, stating that though the process could be improved, the problem largely stemmed from failure in execution and communication by city officials.

Both reports showed that First Deputy Mayor Tony Shorris was not overseeing the related deliberations and processes with clarity, and no one from his office was reading reports that contained key information. Neither the DOI report nor Stringer’s report found that Mayor de Blasio was at fault or even aware of the deal.  

That the DOI should consider the matter still open is not surprising. Its report pointed out that it did not receive all the information and documents requested and that the Law Department denied access to computers at City Hall. DOI claimed that “a substantial number of documents” that it did receive were redacted by the Law Department. The report concluded, “Because DOI did not receive a full production of what it requested, it is unclear what Rivington-related information remains on the City Hall servers and computers, to which DOI was denied access.”

A tense back and forth followed, with Mayor de Blasio and the Law Department, led by Corporation Counsel Zachary Carter, at first denying claims that DOI’s investigation was hindered in any way. “There’s been a huge effort made by various elements of the administration to be cooperative and helpful to DOI and obviously the other entities that are investigating,” the mayor said following the release of the report.

“A huge amount of material was provided,” he said. “There was a lot of transparency. The Law Department has a job to do, to make sure things are done the right way. And there’s a natural institutional tension between the two agencies...I’m very convinced that everything was provided that was necessary, and clearly [DOI was] able to come up with a comprehensive report.”

The apparent attempts to obfuscate the investigation have been a separate but related source of criticism to the issues that led to the Rivington mishap, the likes of which de Blasio has pledged will never happen again. In part, he says, because all deed restriction lifts will go through the Mayor’s desk.

A week after DOI’s report, Inspector General Jodi Franzese wrote to Carter asking that the Law Department give them the information and access they were denied in the investigation. "DOI has the exclusive prerogative to determine how it conducts its investigations and what information is relevant to its investigations,” Franzese wrote. “Neither City Hall, Law, nor any other City agency or official is entitled to interfere or refuse to cooperate with a DOI investigation or determine what material is relevant to that investigation."

Five days later, under DOI’s threat of legal action, Carter released thousands of pages of documents and gave DOI access to City Hall computers. One of the crucial pieces of documentation to emerge was a July 2014 memo that showed city officials had reviewed the benefits and possible drawbacks of converting Rivington House to condominiums. (Carter had also redacted a deed restriction waiver for the Harlem Dance Theater in a separate transaction.)

The newly unredacted memo shows detailed consideration of the deed restriction removal and various options for the Rivington property, indicating a good deal of attention from administration officials about the situation. It is the type of deliberation that de Blasio had indicated did not go into the decision to lift the deed restrictions, which he assigned to miscommunication and bad process, which left a lack of scrutiny over whether lifting deed restrictions on any property advance the city's interests.

While DOI says the investigation continues, that does not necessarily mean that it will release additional findings, a new report, or an addendum to its prior report. A DOI spokesperson declined to give indication about what the public could anticipate may come from examination of new information.

Dick Dadey, executive director of Citizens Union, a government reform group, criticized the mayor and the Law Department about their cooperation - or lack thereof - with DOI, insisting that the response to the investigations was the “exact opposite” of what should have happened.

Zachary Carter’s obligation is to the people of New York City rather than the mayor, Dadey said, and that his actions came across as an attempt to protect de Blasio. “There are a lot of questions about this whole process and who is going to be held accountable for the mistakes that were made along the way,” Dadey told Gotham Gazette. “That the corporation counsel’s office now seems to have attempted to conceal needed information from the DOI raises even more questions about the integrity of this investigation and whether or not we will get to the truth about what happened.”

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by Samar Khurshid, senior reporter, Gotham Gazette
     

Read more by this writer.

Note: Gotham Gazette is an independent publication of Citizens Union Foundation, sister organization of Citizens Union.

For 2017 Effect, Time Running Out for Campaign Finance Bills in Limbo


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above: Melissa Mark-Viverito; below: Ben Kallos (photos by William Alatriste)


New York City’s campaign finance system, particularly its public matching funds program, is considered a national model, and it stays that way by being regularly updated and modernized. The Campaign Finance Board issues reports following each election analyzing ways to plug holes in the system and bolster the already-robust provisions of the relevant law.

But, the next city election cycle, in 2017, may come and go without any improvements made to the system as a package of legislation aimed at doing just that continue to languish in the City Council.

It’s been more than three months since the Council’s Committee on Governmental Operations held a hearing to consider eight bills related to the city’s campaign finance laws. The most significant of the proposals would prohibit contributions from being matched with public funds if they are bundled by people with business before the city (there already significant limits on the contributions those people can make themselves).

Another key bill would provide public matching funds to candidates at an earlier stage in the election, while other proposals enhance disclosure rules for individuals and firms that own entities with business before the city.

These bills were introduced November 10, 2015 and have barely budged, save for the one hearing, despite having broad support from government reform groups and even the backing of the de Blasio administration. At the hearing on May 2, Henry Berger, special counsel to the mayor, testified in support, suggesting only a few technical changes.

At a news conference on Tuesday, Gotham Gazette asked City Council Speaker Melissa Mark-Viverito why the bills hadn’t been prioritized with time running out for them to take effect and be effective in the 2017 cycle.

Mark-Viverito would only say that the Council’s legislative process was continuing. “Sponsors of the bill, I’ve already engaged in conversation with them, we’ve had hearings on all the bills,” she said. “That’s a process internally, have those conversations and decide what we move forward. So conversations have happened with some of the sponsors of those bills.”

In the past, the Council has expedited bills to a vote even if they weren’t time sensitive, unlike the campaign finance bills. Case in point, when the Council approved large pay raises for its members earlier this year, the proposal was introduced, heard and voted on within the span of eight days even though the pay raises would have been retroactive to January 1 regardless of when they passed.

Although it’s not definitively too late now for the Council to move on the campaign finance reform bills, it soon might be. “It is getting late to change the rules of a four-year campaign cycle in what is essentially the third quarter of the game,” said Dick Dadey, executive director of Citizens Union, a government reform group. “That we stand not to have any needed improvements to our campaign finance laws would be a black eye on this Council because it will have been the first time since the law was enacted 25 years ago that quadrennial changes have not been made.”

The reforms under consideration were first recommended by the CFB in its 2013 post-election report, issued September 2014, and the board has continued to push the Council to adopt the changes.

“With so much attention on campaign finance reform in the presidential election,” said Matt Sollars, director of public relations at the CFB, “there is no better time and no better way to demonstrate that New York City’s public financing system is the strongest in the country than by passing legislation to make it even stronger.”

kallos hearing flagCouncil Member Ben Kallos, chair of the government operations committee, is prime sponsor on four of the bills in the package. Right after the May 2 hearing, he said to Gotham Gazette, “I think it’s a matter of the public, who want their voices to be louder than those of special interests, to let their elected officials know that they need to sign on to this bill and they need to bring it to the floor of the Council.” Kallos did not provide comment for this article. Of the other bills, two were introduced by Council Member Jumaane Williams, one by Council Member Fernando Cabrera, and one by Council Member Andy King.

On June 6, the campaign finance board made another campaign finance-related recommendation when ruling on the matter of Mayor Bill de Blasio’s fundraising for the Campaign for One New York, a political nonprofit group set up by his allies to promote universal pre-kindergarten and affordable housing. The CFB ruled in the mayor’s favor but also took the opportunity to question the methods. They urged the Council “to strengthen the city’s protections against influence-seeking by wealthy interests, and pass legislation to more closely regulate fundraising solicitations by elected officials for non-profit organizations, especially 501(c)(4) entities,” referring to the IRS’ designation for issue advocacy organizations like Campaign for One New York.

Susan Lerner, executive director of Common Cause New York, another good government group, also believes the Council could still make changes to the law if it moves quickly. “We’re definitely approaching the point at which it’ll become difficult to implement these bills for the coming election cycle,” she said. “The delay is a matter of concern and is unnecessary.”

The bills are well within the public policy goals of the campaign finance system, Lerner said, and none of them could be considered controversial, although she suspects the bill related to bundlers could be holding up the process. “I think voters and constituents need to know that officials are on the side of the public,” she said, “and not lobbyists who want to use bundling as a way to gain influence.”

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by Samar Khurshid, senior reporter, Gotham Gazette
     

Read more by this writer.

Note: Gotham Gazette is an independent publication of Citizens Union Foundation, sister organization of Citizens Union.

Next Steps for City Council Member's Alleged Ticket Fix


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Council Member Gibson (photo: William Alatriste)


In trying to avoid a traffic ticket more than two years ago, City Council Member Vanessa Gibson might have jumped out of the frying pan and into the fire.

The New York Daily News reported on Monday that Gibson, chair of the Council’s public safety committee, used her influence to get out of trouble when she was pulled over in March 2014 for talking on her cell phone while driving. The details emerged from an unrelated lawsuit filed last week by an NYPD officer, Michele Hernandez, against the city for $75 million.

According to the report, when Gibson was pulled over, she called Hernandez’s superiors, who then asked Hernandez to void the ticket. Gibson has not denied that the incident took place although she told the Daily News that she could not recollect it. If she had received the ticket, she could have been subject to a $200 fine or received five points on her license. Instead, she now faces the prospect of an official investigation and possibly greater monetary penalties.

“In trying to avoid a penalty, she’s made a minor infraction that much worse, that has now called into question her integrity,” said Dick Dadey, executive director of Citizens Union, a government watchdog group.

At a Tuesday news conference, in response to reporters’ questions, Council Speaker Melissa Mark-Viverito said that the incident involving Gibson would have to be probed by the relevant authorities. “There are agencies and entities that exist to deal with those issues,” she said, citing the Conflicts of Interest Board when pressed for examples.

Mark-Viverito also stressed that Gibson would not face any immediate action. "Vanessa has been a great public safety chair, and she has the respect of a lot, of all her colleagues in that role she has played in that position,” Mark-Viverito said. “Overall, she's a respected Council member. So any kind of concerns about having used her position, that has to be taken up by the proper entities in order to look at that. But right now, she's a respected individual and a respected member of this body, and she will continue to serve as public safety chair at the moment."

Gibson was not made available to comment for this article. The next steps around the incident are not immediately clear, but it is unlikely to go away without an investigation.

The city’s Conflicts of Interest Board usually begins a probe based on a complaint but in the absence of one it can initiate an investigation based on other sources such as news reports, and it has done so in the past.

“We can’t confirm or deny whether we did, are doing or might do anything on this matter because the law requires confidentiality,” said Wayne Hawley, COIB deputy executive director and general counsel, in a phone interview with Gotham Gazette. Hawley did not comment at all on the Gibson incident and would not say how the possible violation would be characterized or the potential penalties.

The city’s Conflicts of Interest Law prohibits a public servant from using his or her position “to obtain any financial gain, contract, license, privilege or other private or personal advantage, direct or indirect, for the public servant or any person or firm associated with the public servant.” A violation can lead to a civil fine of up to $25,000. Typically, instances which are probed by the COIB lead to negotiated settlements if a violation is found. This holds true for City Council members as well. However, COIB cannot enforce a fine on a City Council member even if it finds a violation. It can inform the Speaker’s office and the Council, which would then refer the case to the Council’s Committee on Standards and Ethics.

Council Member Alan Maisel, chair of Standards and Ethics, said that the committee could “conceivably” look into the Gibson incident, “but it has to be presented to me.”

“The Speaker’s office or the Council would have to refer it,” he said. “I’m assuming that it’s being investigated as we speak.”

On a report by the standards and ethics committee, the City Council can impose a number of sanctions against an erring member including removal from the position of chair or membership of a committee, a reprimand, a censure, fine or expulsion. Any sanction would require a majority of the ethics committee and then a two-thirds vote of the full 51-member Council.

Maisel said this incident could be “the first potential case” to come before his committee since he took office in 2014, though the committee did examine a case involving Council Member Ruben Wills, who is under indictment, and decided not to proceed until the criminal case is through. “I haven’t been very busy with this kind of issue,” he said.

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by Samar Khurshid, senior reporter, Gotham Gazette
     

Read more by this writer.

Note: Gotham Gazette is an independent publication of Citizens Union Foundation, sister organization of Citizens Union.



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