Get Even More Visitors To Your Blog, Upgrade To A Business Listing >>

Federal Inquiry Into NY Mayor de Blasio Focus on Donors Getting Favors

A Federal investigation into New York Mayor Bill de Blasio’s Campaign Fund-Raising has zeroed in on whether donations were exchanged for beneficial City action in about a half-dozen cases.

Prosecutors have subpoenaed thousands of emails and documents from the New York Mayor, his Senior aides, City agencies, Lobbyists, his 2013 Campaign, donors to the Campaign and to the nonprofit formed to advance his political agenda, the Campaign for One New York, as well as the group itself, which several people with knowledge of the inquiry said played a central role in many of the matters being scrutinized.

Still, after more than six months of digging into the Mayor’s dealings, the inquiry has yet to uncover sufficient evidence to warrant criminal charges that Mayor de Blasio or his aides took official action for donors in exchange for contributions to his nonprofit or to his campaign.

The matters under scrutiny, the people said, involve, among others, a company whose soundstages are used to film television shows such as “The Good Wife” and “Blue Bloods” that wanted to expand its operations, and that depends on City permits; those connected to a lucrative development deal on the site of a former hospital that needed City approvals; a popular restaurant and wedding site that was negotiating a new lease with the City; and a garbage bag company seeking a City contract.

Two donors are now cooperating with the investigation, several people with knowledge of the inquiry said. Investigators recently secured the assistance of Harendra Singh, owner of Water’s Edge restaurant in Queens, who has been indicted on unrelated Federal fraud and bribery charges. Mr. Singh had met with Senior officials in City Hall about issues involving his restaurant, and was close to resolving them when he was arrested last year, two people with knowledge of the inquiry said.

The second donor, Jonah Rechnitz, has pleaded guilty to Federal conspiracy charges and has been providing information in the fund-raising inquiry and other cases, according to officials and Court records. Information from Mr. Rechnitz, a real estate developer who sought the Mayor’s help for his business, has led to unrelated charges against three senior police officials, a veteran municipal union leader and a financier.

Mr. Singh and Mr. Rechnitz were cooperating with the inquiry, which is being conducted by the Federal Bureau of Investigation and the office of the United States Attorney in Manhattan, Preet Bharara, in an effort to seek leniency for their own crimes, several of the people said.

The focus on the roughly half-dozen cases comes as investigators appear to have concluded that several other fund-raising or related matters that had been under Federal scrutiny, or were the subject of State or Local inquiries, now seem less likely to yield criminal charges, according to several of the people, who include defense lawyers, City officials, Political Consultants and others with knowledge of the matter.

Among those matters: the lifting of deed restrictions on a Lower Manhattan nursing home that allowed it to be sold to luxury condominium developers at a $72 million profit; whether an animal rights group that supported removing horse carriages from City streets got favorable treatment in return for generous donations to the Campaign for One New York; and whether the Mayor, or those acting with him, violated State Election law in raising money for three Democratic candidates to help the Party gain control of the State Senate in 2014.

City officials and lawyers representing some of the subjects of the investigation, however, contend that it has focused on what they characterize as the traditional business of Politics and Government: donors supporting the Mayor and later seeking what they said was his legitimate help on issues of interest to them.

A spokesman for Mr. de Blasio said in a statement that the administration was “absolutely confident” that its members had acted appropriately at all times. “We don’t do pay-to-play,” the statement said. “Out of an interest of protecting the integrity of an ongoing review, we can’t comment further at this stage.”

As for the issues still being scrutinized, several lawyers for subjects of, and witnesses in, the fund-raising inquiry and others with knowledge of it have said the Campaign for One New York has drawn increasing attention. All spoke on the condition of anonymity because they were not authorized to discuss what is being examined by the authorities.

The nonprofit, which could take unlimited contributions because of its legal status, formed shortly before Mr. de Blasio took office, and raised more than $4 million to push his political agenda; much of it came from developers, unions, lobbyists and people and firms with business before the City. Watchdog groups complained that it amounted to a “shadow government,” allowing lobbyists, consultants and others to funnel money to the Mayor unfettered by the City’s strict Campaign Finance laws.

The nonprofit shut down in March; Mr. de Blasio said it had served its purpose of pushing for passage of universal prekindergarten and an affordable housing plan. At the time, the group was the subject of an inquiry by the Joint Commission for Public Ethics, a State agency that enforces the lobbying law, and a formal complaint filed with the City’s Campaign Finance Board.

Some of the earliest and most generous donors to the Campaign for One New York are among those whose contributions, along with their actions and those of the Mayor and members of his Administration and Campaign staff, are under scrutiny, several people with knowledge of the inquiry said.

The first two donations to the group, made on Jan. 24, 2014, just weeks after Mr. de Blasio was sworn in, were for $25,000 each and came from Broadway Stages, the sound stage company seeking to expand, and the Company’s President, Gina Argento.

While an inquiry into the Mayor’s fund-raising continues, investigators appear to have turned their attention away from whether a group that sought to ban the carriages won Mayor de Blasio over with political donations. By then, Ms. Argento and her company were well known to the Mayor. She was the second-largest bundler of contributions for his 2013 run, City records show she brought in over $100,000 for the Campaign and transition, and even spent $250 to rent the costumes that Mr. de Blasio and his wife, Chirlane McCray, wore at a 2014 Halloween party for children at Gracie Mansion. The company said it also paid for costumes for more than 100 children from homeless shelters who attended the party.

One of Ms. Argento’s companies also gave $10,000 to the Putnam County Democratic Committee in October 2014, when the Mayor was urging his donors to support Democratic efforts to wrest control of the State Senate. Broadway Stages also gave $35,000 to the Mayor’s Fund to Advance NYC, a charity that is led by Ms. McCray. Ms. Argento served on the Group’s Advisory board until July.

John J. Ciafone, a lawyer who is married to Ms. Argento and represents her and Broadway Stages, would not confirm the existence of a Federal inquiry, but said that neither she nor the company had engaged in wrongdoing. Neither, he said, had sought help from the Administration for Broadway Stages’ expansion plans, which include new sound stages in Brooklyn and on Staten Island, in exchange for its contributions. “Broadway Stages and Gina Argento has not gotten a penny from the city for any of these projects — not a penny!” he said. Mr. Ciafone suggested that his wife and the company had been pressured to donate. Their business, he said, relied directly on the discretion of the Mayor’s office, which issues film permits from the Film Commissioner.
“They put a lot of pressure on people like Broadway Stages and I’m sure the other film people to give money to the mayor, to give money to C.O.N.Y.,” he said, referring to the Mayor’s nonprofit. Mr. Ciafone said there could be “repercussions in terms of not contributing,” adding, “People don’t understand that.” Mr. Ciafone said the pressure had not come from Mr. de Blasio himself, but rather “from several people — fund-raisers, staff fund-raisers, several people on behalf of the mayor” whom he could not name. He also denied suggestions that Ms. Argento had engaged in a so-called Straw Donor scheme, saying Mr. de Blasio’s Campaign had attributed donors to her whom he said she had not solicited.

Investigators believe that Mr. Singh used a straw donor scheme in a bid to support the Mayor, several of the people said. Mr. Singh, his associates and relatives gave more than $50,000 to the 2013 Campaign and held two fund-raisers at Water’s Edge, which is on City-owned land in Long Island City. The City moved to evict him in early 2015, after an audit concluded that he had underpaid his rent and owed $1.8 million in back rent and fines. He challenged the findings and sued to delay the eviction; at the same time, he sought help from City Hall, the people said. Although some City officials argued that Mr. Singh did not deserve a new lease until he was a tenant in good standing, he worked out a deal to reduce his arrears and fines. It was nearly complete when he was arrested on the unrelated charges in September 2015, the people said.

Other matters still under scrutiny include the sale of Long Island College Hospital and the awarding of a City contract for mint-scented garbage bags billed as repelling rats, the people said.

In the hospital sale, Prosecutors are examining the role of Mr. de Blasio and other officials; the Mayor’s nonprofit; and a health care union, 1199 S.E.I.U., which gave the nonprofit $250,000 in 2014.

In the case of the garbage bag contract, investigators are examining whether two $50,000 contributions by the company’s owner to the nonprofit resulted in the award of a City contract to another company that bought $3 million worth of rat-repelling bags.

NYC Wins When Everyone Can Vote! Michael H. Drucker


This post first appeared on The Independent View, please read the originial post: here

Share the post

Federal Inquiry Into NY Mayor de Blasio Focus on Donors Getting Favors


Subscribe to The Independent View

Get updates delivered right to your inbox!

Thank you for your subscription