Gotham Gazette

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De Blasio Fundraising Exposed Grey Area for Ethics Board

mayor bdb fl chir

(photo: Michael Appleton/Mayoral Photography)

In the last three years, Mayor Bill de Blasio has been investigated by law enforcement and oversight entities at the city, state, and federal levels for soliciting donations from people seeking favors from his administration. While several of the investigations have concluded without chargers, investigators and others have criticized the mayor for shirking conflicts of interest and campaign finance rules.

In the case of the city investigation, conducted by the Department of Investigation (DOI) and referred to the Conflicts of Interest Board (COIB), it is hard for the public to know just how close to breaking the law the board felt he came.

What is known is that DOI investigated thoroughly and found the mayor had violated guidance from the COIB, the agency tasked with enforcing the city’s ethics statute, when he raised money for a political nonprofit from individuals with or seeking city business; and that COIB, despite the DOI’s substantiation of the claim, did not take formal, public action against the mayor. It has also become clear that de Blasio is unwilling to be fully transparent about his communications with COIB, and that the mayor’s case has led COIB to adopt a new rule around the type of fundraising he did.

For serious violations of the conflicts of interest law, COIB has a range of enforcement options, from issuing public admonishments and imposing fines, to negotiating discipline, including termination, with the employee’s agency. But for minor violations or when something in the law prevents prosecution, which includes the grey area the mayor has operated in, COIB can only respond from a grey area of its own.

In the absence of charges, the DOI referral may still have resulted in what COIB refers to as a “private warning letter,” a tool it employs outside its formal adjudication process, sent to the mayor. Strict privacy provisions in the city charter and due process concerns prevent the board from discussing it, and the mayor, who is at liberty to be fully transparent, refuses to answer questions about the recently-revealed investigation into his behavior, including the DOI findings and potential COIB correspondence.

Richard Briffault, the COIB chair, told the New York Times that the board was prevented from issuing a fine or a public reprimand in de Blasio’s case because of restrictions in the ethics law. (Two other penalties -- joining a settlement with the violator’s employing agency, and ordering the employee to pay back any financial gain -- would not apply to the mayor’s fundraising.)

De Blasio has refused to speak on the matter since the latest news was revealed, first in reporting by The City, only saying that he believes he has sufficiently addressed an issue that is now past, without acknowledging the new information about the DOI referral -- including findings of wrongdoing by him -- or the question of whether he received a private warning letter from COIB.

When pressed yet again by reporters at an unrelated news conference last week, the mayor maintained his stance, saying, “I’m just not going over it. Every investigation was closed, no further action was taken, and the entity involved is defunct.”

The Conflicts of Interest Board cannot reveal whether any action is taking place or took place unless it formally determines the law has been violated. That would require the board to fully adjudicate a case and issue a public determination including action taken, which it typically does multiple times a month, often for cases in which a city employee misuses city resources, like using official email accounts for personal business or having outside employment without a waiver from the COIB.

It appears the type of fundraising de Blasio did through his now-shuttered non-profit did not meet the legal requirements for a formal penalty, even though he ignored COIB guidance.

A new rule issued by COIB last week now makes the type of fundraising de Blasio carried out -- soliciting donations to government-affiliated nonprofits from people and companies with pending city business -- a punishable offense.

The rule is based on two COIB advisory opinions from 2003 and 2008, respectively, which were cited in the DOI referral; “an advisory opinion is not a ‘rule of the Board,’” according to a statement that accompanied the new rule, and as such cannot lead to penalty on its own, even if violated.

The episode casts light on how far New York City’s conflicts of interest law goes and what COIB is able to do to enforce it. The de Blasio case has shown challenges around how to bring the ethical underpinnings of the law to bear in cases where there is not a well-established precedent or official proscription.

“The Board has now acted”
In the absence of formal enforcement the board has, since 1995, retained the option of issuing a private warning letter to city employees who have come close to violating the conflicts of interest law, but whose behavior fails to satisfy some element of it.

A COIB spokesperson provided Gotham Gazette a list of four instances in which a private warning letter might be used, including when there is not enough evidence to support a violation, or when “there is some legal reason why the Board is unable to engage in a formal enforcement action.”

Also on the list of instances are when the public servant has already been disciplined by their employing agency and when “a current or former public servant has allegedly committed a minor or isolated violation, particularly if self-reported, e.g., a public servant sent a single email using his City email account related to his private business.”

The latter two are unlikely to be the case for de Blasio and the Campaign for One New York, given that de Blasio does not appear to have ever been formally disciplined, and the fact that his non-profit raised approximately $4 million and solicited donations from people with business before the city on multiple occasions, according to the DOI report.

The conflicts of interest law was enshrined in the city charter in 1990, and there is nothing in it that mentions private or confidential warning letters.

In 1995, while its enforcement staff was severely diminished and facing a mounting backlog of cases, COIB was employing letter notices to ensure compliance in financial disclosure matters. The same year, the board issued six “informal warning[s] or other confidential letter[s]” for the first time. Also that year, the board established a formal liaison with the Department of Investigation to bolster the enforcement work of its anemic staff.

For the past decade COIB has sent between 46 and 88 private warning letters per year, according to its annual report. In 2018, the year the DOI referred the Campaign for One New York case to COIB, 62 private warning letters were sent.

“It’s questionable that an agency can actually create policy without promulgating rules because it’s required that they go through a public process where there’s a hearing and people have input,” Alex Camarda of Reinvent Albany, a government watchdog organization, told Gotham Gazette.

But the private warning letter appears to be an informal tool COIB uses to ensure the law is followed, and tracked every year in the board’s annual report.

“A private warning letter is simply a letter written by the Board to a current or former public servant or lobbyist to educate the recipient about the law relevant to his or her alleged conduct,” the COIB spokesperson told Gotham Gazette in an email.

In COIB’s Monograph, which provides commentary on the conflicts of interest law, it states that private warning letters “sometimes prove useful in the enforcement process if a public servant who has been so warned commits another offense.”

Going forward, the new COIB rule will make soliciting donations from entities with city business to nonprofits affiliated with the city or a city official subject to the ethics law. Violations could result in fines of up to $25,000, the highest the board can impose.

But the new rule is not likely to apply to de Blasio’s past actions. In the COIB statement announcing the rule, the board said, “Without any ‘rule of the Board’ governing official fundraising, the Board is prohibited by the Charter from imposing a penalty on a public servant” who violated the Charter’s “catch-all” provision related to conflicts with one’s official duties. In the case of fundraising for nonprofits affiliated with a city agency or public servant, the statement says, “The Board has now acted to fill this gap.”

by Ethan Geringer-Sameth, reporter, Gotham Gazette      

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At Manhattan Charter Commission Hearing, Pleas to Reconsider Major Planning Changes

anhd thriving communities rally

(photo: @ANHDNYC)

The City Hall chambers of the New York City Council were packed with over 100 people on Thursday evening for a hearing of the 2019 Charter Revision Commission. New Yorkers who attended, including some elected officials, were largely focused on always-contentious land use issues and processes that the commission is considering as part of its larger effort to rethink aspects of city governance.

The Manhattan hearing was the fourth of the five boroughs, to be followed by Staten Island on Tuesday night, where the 15-member commission heard reactions to its recently-released “preliminary staff report,” wherein the commission staff sought to narrow the scope of the body’s final months of deliberations as commissioners propose changes to voters on the November ballot. The commission will announce its city charter revision proposals this summer, providing months for public education on the potential changes that could touch on the powers of certain elected offices, city budgeting, voting procedures, and more.

Many who testified -- and rallied outside City Hall ahead of the hearing -- were members of organizations in the Thriving Communities Coalition, which is calling for more sweeping changes to city planning and land use processes than the charter revision commission appears to be considering.

Other topics of interest among those who testified over the course of more than six hours were elements included in and excluded from the staff report, such as the creation of a budgetary rainy day fund, instituting ranked-choice voting, strengthening the Civilian Complaint Review Board (CCRB), which deals with police misconduct allegations, and the creation of a city chief diversity officer.

The Thriving Communities Coalition argues the status quo in city planning is racist and socio-economically unequal. Members of the New York City Council Progressive Caucus, which is backing the idea of the city charter being amended to include a mandatory comprehensive city plan every ten years, something the charter commission appears disinclined toward, joined the rally to urge the commission to consider such a proposal.

Council Members Carlos Menchaca, Antonio Reynoso, and Brad Lander were among those who spoke. Manhattan Borough President Gale Brewer also spoke at the rally and proceeded to give testimony in front of the Charter Revision Commission.

“The city needs to and must intentionally plan and invest for communities like the South Bronx, if it wants to assure an equitable, diverse, and thriving future for the city,” said Carmen Vega-Rivera, leader of Community Action for Safe Apartments.

Uniform Land Use Procedure (ULURP) and Broader City Planning
The rally leading up to the hearing mostly focused on the city’s ULURP process, neighborhood rezonings, and city planning. Several people who testified at the hearing said they believe the possible charter revisions being considered by the commission, per the staff report, are appropriate, but inadequate.

Community Board 8 Manhattan Chair Alida Camp asked that boards like hers, which provide non-binding input on land use matters that require city approval, receive earlier notification and an additional 45 days as part of the process to provide public notice and vote on applications. Camp also said the Mayor has too much power in the rezoning process. “We ask that mayoral zoning overrides be prohibited,” she said.

Borough President Brewer urged that the possible proposals on ULURP as outlined in the commission staff report go forward. These include providing more time for the early stages of the ULURP process and clarifying how city plans and projections impact each other. She also advocated that Borough Presidents should play more of a role in ULURP.

Brewer also criticized the mayoral administration over neighborhood rezonings that have been moved for targeting neighborhoods of low-income people of color, urging for the Department of City Planning to take a more long-term approach.

“I further urge the commission to propose a charter amendment requiring decennial review of the zoning resolution,” she said.

Brewer further argued the charter should mandate a publicly accessible map portal for Zoning Lot Development and Easement Agreements as well as specifications regarding how “major” and “minor” modifications are defined when it comes to Special Permits from the City Planning Commission.

The Civilian Complaint Review Board
As it has at other hearings, the CCRB received a lot of attention during the Manhattan meeting on Thursday. The consensus for most people giving testimony was that the Police Department needs further oversight via the CCRB and that the NYPD commissioner should not have the current level of discretion in the disciplinary process.

Whether the CCRB should be elected or appointed by elected officials as is currently the set-up was subject to more debate because of perceived bias from the City Council, which must approve the 13 appointees.

Charter Revision Commissioner Sateesh Nori came out strongly against the idea of popular elections of CCRB members. “That is why we have Donald Trump in office,” he said of decisions by the masses. When challenged on that stance, he responded saying that the CCRB discussion was “hinging on an election when every other discussion is about how elections are flawed.”

When Brewer testified, commissioners asked her if she thought the CCRB should be decided through a vote, and she said, “I am not supportive of the vote because people don’t turn out unless they are aware.” She agreed with the charter commission’s proposals, but also suggested further amendments, which included codifying the current Memoranda of Understanding to ensure cooperation between the CCRB and police department and setting the CCRB budget at 1% of that of the Police Department’s.

Ranked-Choice Voting
As has been the case throughout the charter commission process, most who testified and discussion ranked-choice voting on Thursday expressed strong support for instituting the process, which would help avoid costly runoff elections and also provide for more apparent popular support among the winners of heavily contested elections.

New York City only currently holds runoffs for citywide positions, where as elections for borough presidencies and the City Council can be won by simple plurality. Ranked-choice voting could eliminate run-offs and provide so that the winner of all races has reached whatever the set threshold is, perhaps 50%, after multiple rounds of tallies.

Rainy Day Fund
Andrew Rein, President of the Citizens Budget Commission (CBC), a non-partisan, nonprofit watchdog and think tank, gave detailed testimony supporting the creation of a possible Rainy Day Fund (RDF), which would also need state approval and, he said, help the city better prepare for recessions and tough budgetary times. He recommended mandates that the RDF be big enough to cover a two-year, multi-billion-dollar budget gap and be provided minimum annual deposits when there is economic growth, with restrictions on withdrawing from the fund unless there is an economic contraction.

Overall, Rein said CBC hopes the commission will keep its proposals for changes to city budgeting minimal. “Since the current system isn’t a problem, we shouldn’t try changing it,” he said.

Chief Diversity Officer
Wendy Garcia, the Chief Diversity Officer from City Comptroller Scott Stringer’s office, stressed the need for a citywide chief diversity officers as well as one at every city agency. Stringer has made the push for such requirements his number one priority in charter revision.

Garcia indicated that there is evidence of the effectiveness of her position, saying that it has helped the comptroller’s office increase contract spending with minority- and women-owned businesses from 11% to 29%.

*Note: Gotham Gazette did not stay for the entire six hour-plus hearing.

by Ashad Hajela, Gotham Gazette

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Experts Point to Anxiety, Short-Sightedness and Political Climate in Amazon Deal Demise

Amazon deal New York announcement

Announcing the Amazon deal that later fell apart (photo: Ed Reed/Mayor's Office)

Current and former city officials and veteran city planners met Monday night to discuss the interplay of politics and policy in the notorious demise of the plan to site an Amazon campus in Long Island City.

A central theme of the panel discussion, hosted by the Urban Land Institute in midtown Manhattan, was the balance the city must strike between articulating and acting on its long-term need for growth and the experiences of people immediately impacted by development.

How the dynamics of those relationships played out in the lifecycle of the Amazon deal was the source of regret and reflection amongst the panel participants, all of whom presented views in support of the tech giant’s migration to New York.

Entitled “Does Amazon Signal the End of a Pro-Growth Political Climate in NYC?,” the discussion occurred before an audience of many urbanists, developers, and architects; and featured James Patchett, president and CEO of the city’s Economic Development Corporation; Carl Weisbrod, former chair of the City Planning Commission; Vishaan Chakrabarti, an architect who oversaw the Manhattan office of the Department of City Planning in the early 2000s; and Kathryn Wylde, president and CEO of the Partnership for New York City, who served as moderator.

The conversation had an air of familiarity -- the result, for the most part, of decades working at the center of New York City development efforts. While all four participants agreed that continued growth is a necessity and the Amazon campus was a lost opportunity, there were nuanced opinions on whether growth is inevitable in a city as big and diverse as New York, and what the political climate has to do with it.

As they agreed on the need for growth, the panelists also agreed populist opposition to economic development projects around the city has shown that the city needs to do a better job communicating the benefits of those projects to the city as a whole.

“We do have a process problem,” Chakrabarti said. “Process is important and I think that people needed to feel like things weren’t happening in some backroom deal.”

Shortly before Amazon announced its plan to move to Queens last November, Crain’s reported that the state intended to circumvent the city’s land use review process, which gives deference to local City Council members and incorporates a lengthy public process. Days later, Amazon announced it would come to New York, triggering a backlash to the project, expressed largely by a core of progressive politicians and advocates expressing a range of criticisms about Amazon as a company, as well as the deal and the process that led to it.

“I think it's less what we -- we meaning the city and state governments -- did wrong than the times that we are in, in New York,” said Weisbrod, who after decades mostly in city government is now a consultant. “And I do think we all know we're in a period, on one hand, of extraordinary success in New York, and at the same time that success has created a lot of anxiety among a lot of people.”

Patchett, who was intimately involved in wooing Amazon to the city, expanded on the idea of an emerging psychology of anxiety around growth as opposed to stagnation, remarking that the city is experiencing “a moment in time when we're having a lot of growth -- we're not in a recession. So it feels like what we have today, we don't need to be as worried about what we might have tomorrow.”

“We have a youngish population who has experienced brutal housing prices and a congested subway system, who really have no memory or inkling of a time when this city was against the ropes,” added Chakrabarti, who helped lead post-9/11 economic recovery efforts, a bit later in the program. “And it's really hard to explain to people that that could and will happen again, probably at some point for some shock we don't know about sitting here today, and that those 25,000 jobs and the multiplier effects it would have had would help insulate us against that future shock.”

For Weisbrod, who has been a fixture in New York City urban development projects since the 1970s, this represents a “fundamental change” in the conversation. “We've always been a city that has, irrespective of political ideology, sort of implicitly if not explicitly recognized that we have to grow, not only for growth's sake, but because we are a city that provides more in the way of social benefits to our residents than any other city in the country.”

Because of the particularities of New York City -- it’s incorporation of five counties rather than being a part of a single one, its commitment to providing broad social services, and the lack of federal contributions to the tax base -- “we are increasingly dependent on our own ability to generate revenue,” Weisbrod added.

Another shift in the public dialogue, revealed by opposition to Amazon moving to a so-called outer borough, has to do with location.

“For 50 years at least...the city has had an economic development strategy of diversifying and dispersing jobs outside of the Manhattan core,” said Weisbrod. “And the irony is that this resistance to 25,000 jobs, however narrow-minded that resistance was, is the kind of resistance that took place because this was an effort to further the city's economic development policy, not simply in terms of tech, but also in terms of geography.”

Wylde challenged the panel to consider whether the problem had as much to do with the city’s approach to the deal -- especially its ability to engage with community stakeholders -- as the evening’s conversation suggested.

“Do we really think that this would have happened if it wasn't the biggest corporation, run by the richest man in the world, after the 2018 primary election?” she asked, with apparent reference to Alexandria Ocasio-Cortez’s upset victory over Joe Crowley in last year’s congressional primary, representing a Queens and Bronx district.

For Chakrabarti, it is a combination of the political moment’s hostility toward “big corporate” and local anxieties Weisbrod referred to. “It's really hard to extricate that because people were taking advantage of those anxieties in order to make their political point,” he said.

During a question-and-answer session, one audience member disagreed with the thrust of the conversation. The spectator told the panel, “I'm a little disturbed by the attitude that I hear from the EDC and also the Mayor that the primary problems involved in this were around communication, Amazon not being willing to work with the city, the national climate, and not really lending a lot of credence to people's opposition, that either for a large number of people this would negatively impact their lives or at very least they have very few mechanisms for pushing back at the way the city is transforming around them.”

According to Patchett, of the EDC, two-thirds of New Yorkers thought the Amazon deal would be good for the city, including more than 70 percent of Queens residents. “But that is not to undermine the very legitimate concerns that people had about this case” and about growth in general, he told the audience. “That's not just a feeling, that's a reality for a lot of people.”

But for the panel of city planners and economic development experts with pro-growth lenses, the look back at the Amazon deal was more of a post-mortem than an assessment of local concerns.

“I sort of have a sense like I’m at a memorial service here,” Weisbrod said at the outset.

by Ethan Geringer-Sameth, reporter, Gotham Gazette      

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