A New Council Spending Inquiry
This article is by William K. Rashbaum, Ray Rivera and Russ Buettner.
The authorities are investigating whether a Queens social service agency that received city money through the efforts of Councilman Hiram Monserrate also helped politically with his campaign for the State Senate, according to a law enforcement official.
The Queens district attorney’s office and the city’s Department of Investigation are looking into allegations that more than two dozen workers for the nonprofit agency, Libre, collected signatures to help Mr. Monserrate get on the ballot in 2006 for his unsuccessful bid for the 13th Senatorial District seat in Queens, the official said.
Mr. Monserrate has directed more than $2.7 million in Council discretionary and capital funds to the group, including more than $2 million earmarked in the last two years for a community center, a joint project with another group the councilman finances. Although no money has been spent on that project, the councilman has also obtained nearly $400,000 more for Libre to provide a range of other services since 2004.
The councilman is closely affiliated with the group, whose name stands for Latino Initiative for Better Resources and Empowerment. Several senior members of his Council staff have served as officials of the organization, and one former top executive said Mr. Monserrate recruited him for the post.
Mr. Monserrate, a former New York City police officer, said in an interview on Wednesday that he was unaware of any investigation and knew nothing about any efforts by Libre to collect signatures for his nominating petitions. He declined to comment further about any investigation, saying, “The Council’s lawyers have advised us not to talk about ongoing investigations into Council discretionary funding.”
Earlier this week, Mr. Monserrate asked Council leaders to withdraw funding from a second community group with which he is closely associated, one he once ran and to which he has allocated more than $330,000 since 2002. That group, the Latino Action Center, has never filed tax returns, never registered as a charity with state authorities and owes the state more than $74,000 in unpaid penalties for failing to provide workers’ compensation insurance, according to official records.
Mr. Monserrate said he asked that the funds be withdrawn because the group had indicated to the city that it no longer sought them. He said he was not clear about the group’s reasons.
The councilman, in what appeared to be a veiled reference to State Senator John D. Sabini, whom he is expected to challenge in the fall, contended that the investigation into the accusations that Libre had helped collect signatures for him “is clearly associated with the individual who is concerned about a primary in September.”
Mr. Sabini denied any role in the inquiry, saying, “I certainly haven’t spoken to the D.A. about this, and I only know what I’ve read in the newspapers.”
The relationship between council members and the community groups to which they allocate city money has come into sharp relief against the backdrop of a broader inquiry by federal prosecutors and the city’s Department of Investigation into how council members dole out millions of dollars in discretionary money they control to nonprofit agencies that provide a broad range of services.
Last month, two aides to Councilman Kendall Stewart of Brooklyn were charged in federal court with embezzling $145,000 from a nonprofit organization he financed. City and federal authorities, in announcing those charges, said they were also aggressively examining the nonprofit groups that council members finance.
Libre has received city contracts to help immigrants and provide job training and educational support services.
The investigation into the allegations that Libre did political work for Mr. Monserrate was not directly related to the broader joint inquiry by federal prosecutors and city investigators, the law enforcement official said.
Neither city nor federal authorities would say whether they were examining Libre’s finances as part of their larger inquiry. The group’s director recently acknowledged that it was “a mess,” though he noted that he believed its poor fiscal condition stemmed from sloppy record keeping rather than misconduct.
As part of the inquiry into accusations about political work for Mr. Monserrate, investigators from the office of the Queens district attorney, Richard A. Brown, and the Department of Investigation reviewed the councilman’s nominating petitions filed with the Board of Elections, which bear the names of the people who collected the signatures.
The investigators are trying to determine whether any of the political work was paid for with city funds allocated to Libre by Mr. Monserrate, which could lead to charges of larceny, official misconduct, filing a false instrument or falsifying business records, the official said.
Kevin Ryan, a spokesman for Mr. Brown’s office, declined to comment.
The Latino Action Center, the group whose funds Councilman Monserrate sought to withdraw earlier this week, is directed by his former chief of staff, Charles Castro, with whom the councilman worked in the Police Department.
Mr. Castro left a phone message with a reporter on Wednesday saying he would call back, but did not. Further calls to him were not returned.
Mr. Monserrate said in the interview that the group sent a letter Monday to the Department of Youth and Community Development, which was administering the money the councilman had allocated to the group. The letter said, without explanation, that the group was declining the money. He said he asked the department to withdraw the funds based on the letter.
The center’s city contracts have been for such initiatives as immigration assistance, graffiti removal and job readiness programs. It is unclear where the agency operates now. A building manager and tenants at three addresses the group has listed with the city in recent years said it has not been at those locations for several years.
Mr. Castro, a former police sergeant, along with Mr. Monserrate and other members of a Hispanic fraternal officers group, sued the department in 1999, arguing that it discriminated against black and Hispanic officers in meting out discipline.
According to city records, Mr. Castro has been the chairman of the Latino Action Center since at least 2003.
Mr. Monserrate acknowledged a close relationship with Mr. Castro and other officers of the Latino Action Center, as well as Libre, but he said “it’s a stretch” to suggest he should shoulder responsibility for their day-to-day operations.
“Just because you know some of the members or have relationships doesn’t mean you’re there looking over their books or investigating their filings,” he said. He said he expected the groups he financed and the city agencies that are responsible for overseeing their operations to conduct their work with due diligence.
He also said he did not believe that any officials of the group worked simultaneously for the groups and his council staff.
“I think there is a distinction between people are being paid and people who are volunteering to serve on the boards and work because they care about this community,” he said.
Ryan Dodge, a spokesman for the Department of Youth and Community Development, which oversaw the most of the money Mr. Monserrate allocated to the groups, declined to comment on the department’s oversight of the groups’ work, citing the ongoing investigation.
Rodolfo Herrera, who has been affiliated with Libre since its start and has been its executive director since November, said much of the money earmarked for the group was for a new building to use as a community center. He said some of it was also earmarked for another nonprofit program that Mr. Monserrate has supported, Latin Technologies, which Mr. Herrera also runs.