Document: Letter from City Council

Brooklyn pol put $187G of your dough into wife's nonprofit

BY ROBERT GEARTY, BENJAMIN LESSER and GREG B. SMITH
DAILY NEWS STAFF WRITERS
Tuesday, April 22nd 2008, 4:00 AM

Ward for News

Jannitza Luna, district leader for the Brooklyn Democrats, was on husband Erik Dilan's staff before she started running North Brooklyn Community Council, whose office (above) is on Wilson Ave.

photo: Kathy Villacorta

Erik Dilan

Brooklyn city councilman Erik Dilan has funneled more than $180,000 in taxpayer money into a small nonprofit run by his wife, the Daily News has learned.

Dilan (D-Brooklyn) was sole sponsor of "discretionary" city funds for the North Brooklyn Community Council, a nonprofit that started out organizing youth football and has expanded almost entirely with government money.

His wife, Jannitza Luna, has been executive director of the group since at least 2005, tax records show.

She was on Dilan's staff before she began running the nonprofit, and she is a district leader for the Brooklyn Democrats.

Each City Councilmember gets a pot of "discretionary" money to use for pet projects in their districts. Potential misuse of these funds is at the heart of an ongoing probe by the city Department of Investigation and the Manhattan U.S. attorney.

Two aides to City Councilman Kendall Stewart (D-Brooklyn) have been charged with embezzling $145,000 from a nonprofit supported with "discretionary" funds. Stewart has not been charged and denies wrongdoing.

The News also disclosed that City Councilwoman Maria del Carmen Arroyo (D-Bronx) sponsored $80,000 in member items for a Bronx nonprofit that employed her sister and a nephew.

In an interview with The News, Dilan said he disclosed the conflict to the City Council and that no one objected, although a letter sent to the Conflicts of Interest Board obscures details of the arrangement.

At least three times in the past three years, Dilan sponsored member items for the North Brooklyn Community Council totaling $187,500. The amounts grew each year, from $30,000 to $57,500 to $100,000.

He was engaged to Luna sometime in 2006 and they got married in March 2007, he said. During that time, she was listed on the group's tax forms as the only salaried employee.

On the latest tax form filed, 2006, she claims a salary of $45,000. The group also paid $34,658 to unnamed "consultants."

On Friday, at the group's small storefront office in Bushwick, a receptionist told a reporter she would give Luna his number. Luna did not return the call.

In its last filing, the group claimed it organized youth sports teams. In an interview, Dilan said the group, which first reported income in 2004, is now doing less sports and more of what he called "immigrant services."

Each year, at least 90% of its funds come from either city or state taxpayers. Brooklyn Democratic leader and Assemblyman Vito Lopez sponsored a $50,000 state "member item" for the group last year, records show.

The Dilan and Lopez member items are part of a larger pool of state and city funds going to the group totaling $802,010, records show.

While Dilan and Luna were engaged and he was sponsoring taxpayer money for her group, Dilan said, he did not disclose the relationship.

"I didn't have to technically make a disclosure because it wasn't family," he said. "Once I got married, I had to disclose. We never shared common bank accounts until we were married."

Shortly after his marriage, Dilan mentioned his wife worked at North Brooklyn during a City Council session, stating, "I'm especially proud of North Brooklyn Community Council. As many know, I'm a recently married man and my wife works there. And I have to do that for disclosure purposes, as well."

In a financial disclosure form filed in June, Dilan claimed his wife was paid only with state funds.

In an interview, Dilan explained, "I disclosed the conflict of interest once she became a family member. It's a legitimate organization that provides a legitimate service. Once it became clear that we were going to be a family, prior to any appropriation I went to the general counsel to have them check it out."

Actually, the general counsel's office did not take any position on the conflict, instead simply passing it on to the city Conflicts of Interest Board.

In doing that, a City Council lawyer misidentified the employer of Dilan's wife.

In a July 20 letter, Noran Camp, counsel to the Committee on Standards and Ethics, wrote that "Council Member Erik Dilan disclosed that his wife works at North Brooklyn Community Hospital, a recipient of funds from the budget."

A spokesman for Council Speaker Christine Quinn (D-Manhattan) admitted the letter was a mistake, but would not take a position on whether Dilan's arrangement is a conflict.

The Conflicts of Interest Board also declined to comment.