Feds Probing Larry Seabrook Non-Profits in Council Slush Fund Inquiry

Posted by John DeSio at 5:41 PM, April 30, 2008

Bronx Councilman Larry Seabrook is a target of several probes of financial abuse at the City Council, it was reported today.

Non-profit organizations financed by Seabrook are being probed by both federal investigators and the Department of Investigation, according to the New York Times.

One of those non-profits, the Bronx African-American Chamber of Commerce, was blocked from receiving nearly $1 million in funding that Seabrook had requested for it, the Voice reported last week. The organization is located in Seabrook’s White Plains Road district office and would not produce tax records upon request.

Seabrook and other Council Members have come under fire in recent weeks for funneling taxpayer dollars into suspicious organizations with ties to their friends and families. Such funding, known as “member items,” is handed out at the council members’ request with little, if any, City Council oversight.

City Freezes Bronx Councilman's Million-Dollar Non-Profit Play

Posted by John DeSio at 9:12 AM, April 24, 2008

Too close for comfort?

Amid recent revelations about a secret Council slush fund and taxpayer-funded shenanigans at non-profits, the city has denied Councilman Larry Seabrook's near million-dollar request to fund a new non-profit that's located within his district headquarters.

The city system of checks and balances denied the Bronx Democrat's appropriations, freezing his Fiscal Year '08 requests of $887,244 to fund the newly founded Bronx African-American Chamber of Commerce. The non-profit did not have the proper paperwork in place for the money to be released.

A divider is all that separates the commerce chamber, at 3687-B White Plains Road, from Seabrook's district headquarters at 3687-A White Plains Road.

The Bronx African-American Chamber of Commerce refused repeated requests to furnish public records about its finances.

The office of United States Attorney Michael Garcia would neither confirm nor deny that Seabrook or the Bronx African-American Chamber of Commerce were targets of the ongoing federal investigation, said spokesman Yusill Scribner. That investigation has already snared two former aides to Brooklyn City Council Member Kendall Stewart for their roles in funneling Council cash to the Donna Reid Memorial Education Fund, and then taking that money for personal use.

Neither Seabrook nor Carl Green, director of the Bronx African-American Chamber of Commerce, returned repeated calls for comment. The organization also denied repeated requests to furnish public records about its financing.

Being less than a year old, the Bronx African-American Chamber of Commerce does not have much of a public profile, only receiving media attention for a recent press conference to discuss a program to train minority applicants to become truck drivers. A group flyer announces the “Jobs to Build on Initiative,” jointly sponsored by Seabrook, that “offers free training and employment services to low skilled, unemployed or under employed individuals.”

According to the New York State Department of State, the Bronx African-American Chamber of Commerce was founded on May 2, 2007 — just weeks before the deadline for council members to submit requests for the FY2008 budget. The group incorporated using the Bronx address of 1530 East 222nd Street, but now shares Seabrook's office.

Multiple attempts, by both phone and email, to obtain the organizations tax records were unsuccessful. The chamber also failed to produce a tax return when asked in-person at the group’s headquarters. The two groups share the same doorbell and front door, and the office of the chamber of commerce is nothing more than a desk within the same room, separated by a divider. The woman who answered the door at the organization could not provide a business card either for the chamber or for Green.

Tax returns for non-profit groups can also be obtained through the Attorney General’s bureau of charities, but a spokesperson for AG Andrew Cuomo, said the non-profit was not registered with his office. He said this could be because the chamber is new or because it's not required to register, which many other chambers of commerce are not.

In addition to Seabrook's request of $887,244, the entire Bronx council delegation requested an additional $25,000 for the group, bringing the total to $912,244, all of which was held back by the agencies charged with administering the grants.

Of the six member item grants allocated to the Chamber of Commerce, three are administered by the Department of Youth and Community Development for immigrant services, adult literacy, and “to provide funding support for youth programs and small businesses.” Through the Department of Small Business Services, the Chamber of Commerce was scheduled to receive its largest grant, $335,000, to do “commercial revitalization work” as well as two others for Minority and Women’s Business Enterprises, and financial literacy.

Spokespersons for both agencies declined to comment, citing ongoing investigations. But one City official, who requested anonymity, said that neither agency ever issued the funds because the chamber failed to pass a VENDEX questionnaire, something required for any group doing business with the City. To fulfill a VENDEX integrity check, organizations must submit tax forms, proof of insurance and other corporate documents outlining the mission of the group. The Chamber of Commerce, said the official, did not do that.

Seabrook also requested funding for another organization with a checkered past, the Northeast Bronx Redevelopment Corporation, which also uses the address of 1530 East 222nd Street, where the chamber was initially incorporated. In 2006, the City revoked money allocated to the group to construct a hip-hop museum in The Bronx after an audit by small business services uncovered “unsatisfactory performance,” causing the group to be “red-flagged.”

City Council Scorecard: Two Indictments and an Ongoing Investigation

Posted by Tom Robbins at 5:22 PM, April 16, 2008

The City Hall headline for tomorrow will read that a top aide to a Brooklyn councilman, along with another staff member, were indicted in Manhattan federal court for ripping off $145,000 of city grants to a nonprofit group they controlled.

Asquith Reid, chief of staff to councilman Kendall Stewart (D- Flatbush) is charged with embezzlement and witness tampering, facing up to 80 years in prison; Joycinth Anderson, council staff member, faces embezzlement charges as well, and up to 40 years in the clink. As of late Wednesday afternoon, the two had yet to be arraigned. Kendall was not named in the charges.

But the subtext of the crimes—the phantom budget lines that were used to fund the nonprofit group, and whether Council Speaker and likely mayoral candidate Christine Quinn faces any legal jeopardy here—is going to be much more important. Here's what law enforcement officials had to say on that score:

Manhattan United States Attorney Michael Garcia: "The investigation will continue. We are going forward, scrutinizing the process and the money that was allocated, and we will see where that leads. With respect to who is a target and who is not, as in every case, I am not going to comment."

City Investigations commissioner Rose Gill Hearn: The phantom budget holding codes were "intentionally inscrutable... Unfortunately, this practice of using fictitious nonprofits casts a pall on the many legitimate nonprofits that received money via that unscrupulous method. Today's indictment shines sunlight on discretionary funding and the need for total transparency for that public money."

Hearn also commended Quinn for now tackling the issue of the phantom budget lines scandal which broke earlier this month, and said her efforts at reform were "the right thing."

But both investigators refused to give either Quinn or the council's administration an all-clear sign, and their comments suggested that they have a lot more to look at.

Here's Quinn's written statement on another bad day:

"I think as you all know, we've cooperated fully with the US attorney and the Department of Investigation on all of their requests for information and on the investigations that they are conducting. I have full confidence in their ability to conduct this inquiry. It would be inappropriate to comment further at this time."