The head of a lower Manhattan community garden is demanding the state attorney general and the city Conflicts of Interest Board probe plans to turn over valuable city land to a group of developers that includes a non-profit with strong ties to Mayor de Blasio.
The Brooklyn-based RiseBoro non-profit includes among its board members Frank Carone, who, campaign finance records show, has donated nearly $11,000 to de Blasio since 2011. Carone is also the chief lawyer for the Brooklyn Democratic Party.
RiseBoro, formerly known as the Ridgewood Bushwick Senior Citizens Council and once synonymous with the disgraced late Assemblyman Vito Lopez, is one of three entities slated to take over Elizabeth Street Garden in Nolita and convert it to 123 units of affordable housing.
The two other developers are Pennrose and Habitat for Humanity NYC. The city’s Department of Housing Preservation and Development selected the team to take on the project, dubbed Haven Green, in Dec. 2017.
Joseph Reiver, the garden’s executive director, contends Carone’s connection to the mayor and his role at RiseBoro — he’s also chairman of the non-profit’s Audit Committee — creates, at the very least, the appearance of a sweetheart deal.
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He’s late — again.
After nearly half a year of hemming and hawing, Mayor Bill de Blasio on Thursday entered the 2020 presidential race, becoming the 23rd Democrat to join the jam-packed field.
The termed-out politician, known for his habitual tardiness, finally decided to run after five months of toying with a White House bid.
“I’m Bill de Blasio and I’m running for president because it’s time we put working people first,” the mayor said in a three-minute YouTube videoannouncing his candidacy.
The opening shots include de Blasio zipping around the city in the back of an SUV — his gas-guzzling choice of transportation for the 11-mile jaunt from Gracie Mansion to the gym in Park Slope.
“Good thing about New Yorkers is they look the same whether they’re really pissed off at you or they like you,” the mayor quips.
He details his “Working People First” slogan by touting his policy initiatives including pre-K for all, paid sick leave and boosting the minimum wage to $15 an hour.
First lady Chirlane McCray also makes an appearance to briefly plug her mental health agenda.
“Everything begins with being healthy and there is no health without mental health,” she says.
Then, as the White House flashes on the screen to dramatic music, de Blasio pivots to a national message.
“Don’t back down in the face of the bully — take him on,” he says. “As president, I will take on the wealthy, I will take on the big corporations, I will not rest until this government serves working people.”
He also vows to fight President Trump head-on.
“Donald Trump must be stopped. I’ve beaten him before and I’ll do it again,” de Blasio says.
Insiders initially thought de Blasio would announce his national campaign the week of his 58th birthday on May 8, but he delayed.
“So you’re still deciding?” NY1’s Errol Louis asked the mayor on May 6.
“Yes indeed,” the dithering mayor said.
Local political experts can’t fathom what prompted the mayor to take the plunge.
“It’s really hard to understand what lane de Blasio plans to ride to the nomination,” said David Birdsell, dean of the Marxe School of Public and International Affairs at CUNY’s Baruch College.
What’s more, people just don’t like him, polls show.
De Blasio has the dubious distinction of being the only candidate or potential candidate out of 23 contenders to earn a negative rating among national Democrats in a March Monmouth University survey. A total of 24 percent gave him a thumbs down while just 18 percent had a favorable view of him.
At home, the numbers are even worse. A staggering 76 percent of Big Apple voters don’t think he should run, according to an April Quinnipiac University Poll.
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If New York City Mayor Bill de Blasio joins the gaggle of Democrats running for president, he will stand out as the only one who flouted federal law so often and so flagrantly that prosecutors felt compelled to publicly explain why they had not gone ahead and locked him up.
The March 2017 statement by the U.S. Attorney’s office in Manhattan announced:
“We have conducted a thorough investigation into several circumstances in which Mayor de Blasio and others acting on his behalf solicited donations from individuals who sought official favors from the City, after which the Mayor made or directed inquiries to relevant City agencies on behalf of those donors,” the statement reported.
Note the absence of the word “alleged.”
The pay-to-play operation—which involved everything from a contract for mint-scented, rat-resistant trash bags to multimillion-dollar real estate deals—is stated as fact. The statement goes on to explain why the prosecutor had decided “not to bring federal criminal charges against the Mayor or those acting on his behalf.”
“In considering whether to charge individuals with serious public corruption crimes, we take into account, among other things, the high burden of proof, the clarity of existing law, any recent changes in the law, and the particular difficulty in proving criminal intent in corruption schemes where there is no evidence of personal profit,” it says.
Those “changes in the law” included a U.S Supreme Court decision in June of the year before, which vacated the corruption conviction of former Virginia Gov. Robert McDonnell, who had accepted a $175,000 loan and various gifts from a dietary supplement manufacturer that sought state assistance in testing and marketing his product.
The decision was written by Chief Justice John Roberts, who explained: “There is no doubt that this case is distasteful; it may be worse than that. But our concern is not with tawdry tales of Ferraris, Rolexes, and ball gowns. It is instead with the broader legal implications of the Government’s boundless interpretation of the federal bribery statute. A more limited interpretation of the term ‘official act’ leaves ample room for prosecuting corruption.”
In short, just arranging a meeting in exchange for a gift does not constitute corruption under the more narrow definition. The accused must have performed an official act such as can be placed on an agenda or memorialized in the record.
That narrower definition of corruption came when the feds in New York were eight months into investigating de Blasio. They felt they were well on the way to making a case.
“The government was lusting, lusting to get de Blasio,” an attorney for a big donor who was repeatedly questioned by the feds told The Daily Beast.
But in instances such as the mint-scented rat-repellent trash bags, de Blasio had simply granted a meeting with parks department officials and facilitated a field test.
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A former City Hall fundraiser who was convicted of taking part in a massive bribery scheme in which NYPD officers were bestowed with lavish gifts that included a private junket to Las Vegas was sentenced Monday to 48 months in prison.
Jeremy Reichberg, who was convicted in January of four counts, including conspiracy to commit honest services fraud and bribery, tearfully asked District Judge Gregory Woods for leniency moments earlier.
“I acted as an adolescent, wanting special attention, feeling that I was entitled to get special attention for my friends who were police officers,” Reichberg said in Manhattan federal court, struggling to read through prepared remarks and pausing often to wipe away tears and blow his nose.
His attorney, Susan Necheles, argued that her client committed crimes of “hubris … ego and gluttony,” saying he paid bribes to cops so he could pal around with them and look like a “big shot.”
She argued that the bribes didn’t get him any big favors or put the public in danger.
“What he got were things that made him look like a big shot,” she said. “He hung out them doing fancy things.”
But prosecutors said Reichberg’s bribes weren’t just to spruce up his image – arguing that he and his former pal Jona Rechnitz got police favors in exchange for their lavish gifts, including help with arrests and difficult-to-obtain gun licenses.
“This was not a crime that created an appearance of favoritism,” said Assistant US Attorney Martin Bell. “This was impropriety of the most basic sort. This was favoritism, bought and paid for.”
Reichberg also was sentenced for two years of supervised release.
“I believe the offenses were about more than dollars and cents. It’s about corruption of an important public institution,” the judge said.
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FOR ADDITIONAL READING:
De Blasio May Want to Be President. What Do His Donors Want?
His fund-raising for a possible White House bid raises ethical questions, again.
New York City Mayor Bill de Blasio’s flirtation with a White House run has generated virtually no interest among voters. One national poll in March found he was the only Democratic candidate with a net negative approval rating, though fewer than half of those polled had any opinion of him at all.
But his potential candidacy has caught the attention of people who do business with the city. They’ve been donating to the mayor’s presidential political action committee, the federal Fairness PAC, his latest vehicle for raising money from powerful interests.
Mr. de Blasio’s lowly showing in the polls didn’t, for example, dissuade John F. Fish, the chief executive of Suffolk Construction, a Boston-based company, from hosting a fund-raiser last month for the mayor’s PAC. Mr. Fish’s company is clearly hoping to expand its business in New York — Suffolk recently hired Shola Olatoye, who led the city’s public housing authority until last year — and may see an opportunity to win favor with a current mayor and future presidential candidate.
What’s disconcerting, however, is why Mr. de Blasio would welcome such donations, given the risk of even the appearance of impropriety, not to mention the fact that his fund-raising has raised ethical and legal questions since he first ran for mayor in 2013.
A donor to his first mayoral campaign pleaded guilty to bribing him to get favorable lease terms for a Queens restaurant. Federal prosecutors indicated that they didn’t charge the mayor because the Supreme Court had recently narrowed the scope of what could be considered corruption.
A donor to one of the nonprofits the mayor has used to advance his liberal agenda and raise his profile pleaded guilty to charges involving bribery after receiving special access to Mr. de Blasio and city officials.
The city’s Department of Investigation found that the mayor violated conflict of interest rules by soliciting donations for his Campaign for One New York from people seeking favors from the city, as the news site The City recently revealed. (The rules would not apply to the presidential PAC.)
That’s not to mention the Manhattan district attorney’s announcement in 2017 that the mayor’s fund-raising for the Democratic campaign to win the State Senate in 2014 violated the “intent and spirit” of campaign finance laws by directing contributions meant for political committees toward specific candidates.
Fund-raising can taint City Hall by giving the appearance of pay-to-play, even if none is involved.
In 2015, the city lifted a deed restriction that allowed a Lower East Side nursing home that once served AIDS patients to be converted to condos. Among those who had pushed for the deed change was the lobbyist James Capalino, who steered $40,000 to Mr. de Blasio’s 2017 re-election campaign and $10,000 to the Campaign for One New York. Mr. Capalino has said that the client he worked for who sought the deed change fired him in 2014 after he was unsuccessful, and that he wasn’t involved in the issue afterward. City Comptroller Scott Stringer investigated the land deal and blamed it on mismanagement by city officials.
Mr. de Blasio, who is barred by term limits from seeking re-election, is using his federal Fairness PAC to pay for his travel to states like Iowa and Nevada, which will be important if he runs for president. Mr. de Blasio has said the group will not accept contributions from anyone in a database of those doing business with New York City, a stricter standard than the federal rules the group must follow.
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Appraisers question process NYC used to value properties before shelling out $173 million to shady landlords
Mayor de Blasio’s release of hundreds of pages of appraisal documents used in the city’s controversial $173 million purchase of 17 properties from two shady landlords has raised more questions than it has answered, appraisers who reviewed the records said.
The biggest irregularity, they said, is that BBG Inc., the appraiser hired by former owners Jay and Stuart Podolsky, submitted an unsigned, “restricted” draft estimate intended only for the client, not the buyer. But the buyer, the city in this case, received a copy of that appraisal.
“It’s inappropriate to use it, especially if you know someone other than the owner might have to rely on your report,” said Michael Vargas, president of the Vanderbilt Appraisal Company. He said the use of draft and “restricted” appraisals is frowned upon in the industry because it gives a client the ability to influence an appraisal.
“It’s a way for the client, the property owner, to control the process,” Vargas said. “It’s kind of like talking to the client and asking him, ‘Let me know if I should change the value to your liking.’”
Paula Konikoff, a lawyer and expert on appraisal standards, said the city should not have accepted an appraisal from the sellers without a signature because it carries little weight as an estimate. “Frankly, they should know better,” she said. “Why didn’t they bother to get the signed document?”
Eight appraisal estimates of the properties offered widely divergent assessments of their worth. One, conducted by the city Department of Housing Preservation and Development, set the total value at $49 million. Another, commissioned by the city Law Department and conducted by Metropolitan Valuation Services, estimated the value of the properties was $143 million. A third, conducted by the Podolsky firm of choice, BBG Inc., was done by appraiser Joel Leitner, who worked for BBG at the time and put the value at $200 million.
City Department of Finance tax records list the total value of the 17 properties at just over $40 million. City tax levies are based on that number. If the properties were worth millions more, as some of the appraisals suggest, it means the city may have taxed the owners too little for years. If the true value of the properties is around $49 million, as one appraisal suggested, the city paid far too much for them..
De Blasio spokeswoman Jaclyn Rothenberg said the broad difference exists because the “valuations prepared by our independent appraiser were based on different assumptions than those used by DOF to annually assess all real property in the city.”
“DOF follows state law in valuing property and its assessments are based on current use. The independent appraisers valued the properties for acquisition purposes,” she said.
Even Leitner described it as “unusual” for anyone but the client to have a copy of such a draft appraisal.
“If my client asked me to give it to the city, I would have said no because it’s unsigned,” Leitner told the Daily News. “That should not be affecting the sales price,” he said, referring to the unsigned appraisal.
The Podolskys have a history of real estate woes in New York City. In 1986, they pleaded guilty to more than two dozen felonies in connection with their real estate holdings in Manhattan. They also allegedly covered up extensive fraud involved in acquiring the properties they are now selling to the city, several sources have told The News.
Last month, the city said it had finalized the deal to buy the 17 properties in the Bronx and Brooklyn used to house the homeless for $173 million. The city plans to convert the “cluster-site” apartments to permanent affordable housing.
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