Longtime Practice of City Council Financing Lands on Speaker’s Shoulders

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In the widening scandal that has revealed the peculiar accounting methods of the New York City Council, a harsh light has been cast on Christine C. Quinn, the Council speaker, who is being asked to answer for a system not of her own making.

Defined by phrases like “phantom organizations” and “slush funds,” the tale of how the Council stashed taxpayer dollars for later use in the names of fictitious groups has surprised watchdog organizations and private citizens. Criminal investigators are now poring over the spending habits of some council members to see if they funneled city money to groups with questionable programs or to whom they had close ties.

It is quickly becoming a campaign issue for officials staring at election battles, including Ms. Quinn, the first female speaker of the Council, who once seemed a promising hopeful for mayor.

But veterans of New York City politics say that many of the practices now being revealed are far from novel or rare. Indeed, they say, they are woven into the very fabric of city government, tough threads spun from the mayor’s near lock on power, which leaves lawmakers with few ways to wield influence, affect life in their communities or make a name for themselves.

The idea of creating fake budget lines for Council discretionary funds appears to have been born after the charter revision of 1989, which abolished the Board of Estimate and gave sole approval over the mayor’s budget to the Council.

The change, in a mayor-centric system, did not give the Council a lot of new power. But it gave members the ability to dole out the discretionary funds that the mayor, seeking to smooth the passage of his spending plan, granted them.

Those funds represent just a tiny portion of the budget — less than six-tenths of a percent in the fiscal year ending in June. But they are critically important to the members as a way to curry favor with supporters and constituents.

“It’s not just the top priority,” said David Yassky , a Brooklyn councilman who is running for comptroller, “but Priorities 1, 2, 3, 4 and 5.”

Since these discretionary funds are relatively small and act as a kind of governmental lubricant, or what Mr. Yassky described as hush money, it is not surprising, analysts say, that the mayor’s side of City Hall never worried much about how council members spent them.

“You’re buying their good will,” said former Mayor Edward I. Koch. “It makes them more amenable to accepting your budget. Budgets, you know, require the other party to accept yours. The mayor is in charge of billions and they’re talking about millions.”

“The difference is incredible,” he added, chuckling.

Given so much freedom and so little oversight, some council members chose to dole out a portion of their funds to nonprofit organizations where friends and relatives worked. And council leaders felt emboldened to park some of the money in budget lines under fake names until fit uses arose for it later. Exactly when the practice of holding money in reserve began remains unclear. Some city budget technicians have died or moved on, and others say they cannot quite remember. But it is clear that the practice is deeply ingrained and that Ms. Quinn, despite her many efforts to move beyond the controversy, is being asked to shoulder the responsibility for it.

“I feel frustrated,” she said on Friday in a telephone interview. But, she said, she did not feel “put upon” by having to answer for the controversy.

The practice seems to have begun with three or four line items with names like “parks improvements” in the early 1990s, when Peter F. Vallone Sr. was speaker. By 2007, the Council was using as many as 18 line items and their names resembled real, if absurd, nonprofit groups, like the Coalition of Informed Individuals or the Magic Mountain Fund.

“It’s hard to be critical of Chris Quinn for inheriting a political institution in the Council that was far, far more abused in the Board of Estimate,” said Richard D. Emery, the lawyer whose suit led to the charter change. “Certainly the fiefdoms of the county leaders, most of whom went to prison for corruption in the history of New York City, were financed through the Board of Estimate’s use of financial largess, which was then passed down through the patronage system and the loyalty system to those who served the county machines. So whatever existed in the Council exists as a huge improvement over the Board of Estimate.”

Source: NY Times Read the complete article here

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