SAYS HE’D HAVE YANKED QUINN’S LEDGER DOMAIN

By FRANKIE EDOZIEN

April 4 2008 - Mayor Bloomberg said yesterday that he had no idea the city budget allocated millions of dollars to phantom organizations at the request of Council Speaker Christine Quinn’s office - and that he would never have signed off on the spending plan had he known. April 4, 2008 — “This is the first I’ve heard of it . . . There’s an investigation, and until I see the results of the investigation, I really can’t comment,” Bloomberg said yesterday when asked about The Post’s front-page report.

When pressed about the revelations funds for dozens of sham groups - including the “Immigration Improvement Project of New York” and the “Association of Community Partners” - were slipped into the budget, Bloomberg said:

“If I found there were fake organizations in there, do you really think that I would sign the budget? Thank you very much. I would hope you’d expect a little more from me, for goodness sake.”

The mayor didn’t attack Quinn for the practice, calling her “the most honest person I know.”

The Post yesterday detailed how Quinn’s office hid millions in taxpayer dollars by allocating them to nonexistent organizations as a way of holding on to funds to dole out later in the year after the budget had been passed.

Sources said those monies were eventually awarded to legitimate groups as political favors to council members, but Quinn, who intends to run for mayor next year, insisted the funds were used to correct mistakes and oversights.

City Comptroller Bill Thompson, also a potential mayoral candidate next year, said that the report raised “serious concerns” and that such actions “would represent a breach of public trust.”

The shady bookkeeping is now the subject of probes by the city Department of Investigation and the US Attorney’s Office.

“We can confirm that the listing under fictitious organizations has gone back to 2001,” Quinn told reporters yesterday.

Late yesterday, Quinn released records that show the practice started with five fake groups totaling $1.1 million.

By fiscal year 2007, it had ballooned to 18 groups and amounted to about $3.6 million.

Quinn and her aides have said that the money was eventually awarded to dozens of legitimate groups across the city and that there were no allegations that those organizations did anything improper.

Quinn said that she ordered her staff several months ago to halt the practice of listing sham groups in the budget but that her aides disobeyed her and continued it.

Quinn’s predecessor as speaker, Gifford Miller, under whose watch the practice expanded, didn’t return calls for comment.

But the prior speaker, Peter Vallone of Queens, whose last budget in 2001 included funding for several nonexistent groups, said he knew nothing about it.

“To use a false name? That never went on when I was there . . . It’s a complete surprise to me,” Vallone told The Post.

Quinn’s potential mayoral rival, Tony Avella (D-Queens), blasted the speaker.

“It is absolutely disgraceful that we’re using phony organizations to set aside money that could be later used down the road for political bribery,” he said.

Councilman Charles Barron (D-Brooklyn), a frequent Quinn nemesis, said: “I find it hard to believe that it was just staff. It is illogical to think she didn’t know about this because she has to use the money.”

But Councilman Simcha Felder (D-Brooklyn) said he didn’t have much of a problem with Quinn’s aides reserving funds for unforeseen expenses.

“In this case, the only thing that’s terribly wrong is the bogus organizations. That’s all,” Felder said.

Felder added that there has to be “a reserve fund when things come up that were not anticipated to be able to help organizations that are in desperate need of money just because somebody made a clerical error.”

Betsy Lyman of the Citizens Budget Commission said the allocations to phantom groups “flies in the face of good government,” especially since Quinn has made an issue of making the budget more transparent to the everyday New Yorker.

Dick Dadey, of the Citizens Union, an organization that has long lauded Quinn’s reform proposals, agreed, saying, “This problem is inconsistent with her efforts as budget reformer.”

Meanwhile, Quinn said she was “not the target” of the investigations and insisted she blew the whistle by telling investigators as soon as she discovered it.

“I stand by the fact that there has never been a council speaker who has been as committed to transparency and clarity in the city budget as I have been,” she said.

Quinn said she was shocked that her instructions were ignored.

“The vast majority of the people who work for me are dedicated public servants who implement the wishes of myself and my colleagues . . . so obviously it’s the last thing I would expect that a direct and clear instruction would not be followed.”

QUINN OFFICE PROBED OVER BOGUS GRANT GROUPS

 

 

 

EXCLUSIVE

By FRANKIE EDOZINN

April 3, 2008 — City Council Speaker Christine Quinn’s office hid millions of taxpayer dollars by allocating grants to phantom organizations as a way of holding the funds to dole out political favors later - bogus bookkeeping that is the subject of city and federal probes, The Post has learned. Among the dozens of fabricated groups that were slated to receive funds were the “Immigration Improvement Project of New York” ($300,000), the “Coalition for a Strong Special Education” ($400,000) and the “American Association of Concerned Veterans” ($422,7The total amount set aside in 2007 and 2008 for the fake organizations - which are each listed by name in the city budget after being inserted at the council’s request - was $4.7 million. In the two years, 30 phantom groups were listed, council aides confirmed.

The money, in effect, became a slush fund for the speaker and was later used at Quinn’s discretion to reward groups that were loyal to her and to fund favored council members’ pet projects, sources told The Post.

The scheme gave “the speaker a stash of cash with which to thank or pay off politically important allies or cooperative council members,” a source said.

Quinn insisted in an interview yesterday with The Post that all of the taxpayer funds were ultimately used for legitimate purposes.

The never-before-exposed practice of hiding the funds dates to 1988, council aides said last night.

“It was used at the speaker’s discretion,” said an insider who worked for the council at the time it was headed by Quinn’s predecessor, Gifford Miller. “People would come in and say ‘We need money for this or that.’ ”

Sources said it may have been started to make an end run around the City Charter, which requires that all funds be allocated at the start of the fiscal year. That limits the speaker’s ability to dole out monies throughout the year as needs arise.

In the interview, Quinn, who plans to run for mayor next year and has made “transparency” in budgeting one of her pet causes, admitted she knew some funds were being held in reserve, but learned only several months ago they had been allocated to sham organizations.

Quinn said she ordered that the shady practice be abolished and only recently discovered her staff had not complied.

“I was kind of sick over the fact that there were things listed in the budget that were not accurate and that my instructions to the staff were disregarded,” Quinn told The Post.

When she learned several months ago that the practice had continued, Quinn said she turned over information about the bogus bookkeeping to “appropriate authorities,” including the city Department of Investigation and the Manhattan US Attorney’s Office.

Quinn’s aides insist she blew the whistle on the practice, but authorities have been investigating some aspect of the council’s finances since last year, sources have said.

Quinn recently hired an outside law firm to help comply with requests from investigators for documents and information dating back several years.

In a development that sources said was tied to the scandal, two of Quinn’s top finance aides were either forced out or resigned earlier this year.