A Letter to Garcia: (Michael) Garcia U.S. Attorney
From Gary Tilzer
An addition of an extra term for city officials will have a chilling effect on competition for elective office, worsening a political system in the City which is already on life support. The immediate critical problem is not that less than 1% of registered voters during the last primary had a choice at the polls; it is the centralization of control in the hands of a new breed of powerbrokers that has evolved since the corruption scandal uncovered in the 1980’s in the Koch administration.
Only one man can stop this elite gang of elected officials, party leaders, lobbyists and their clients from a complete takeover of New York City’s budget and political system: Michael Garcia, U.S. Attorney for the Southern District. Garcia, whose office is mostly known for convicting members of violent organized crime families, must not let the city’s secret powerbrokers end his investigation of the City Council’s member item slush fund scandal. Mr. Garcia, you have assembled valuable resources to stop this new ruling gang from continuing to loot the City’s budget. You must use the power in your hands to do so now. It was the municipal scandal of the 80’s that led to the term limits reform not the money of Ron Lauder
Will Garcia Uncover a New Municipal Scandal to Rival NJ U.S. Attorney Christie’s Accomplishments?
A new type of lobbyists maneuver unregulated through city government causing the same kind of damage to our city as Wall Street investment bankers have done to the nation’s banking system. They scheme around unclear rules, limited regulations and non-existent oversight deliberately left vague by elected officials to benefit themselves and make money for their campaign contributors. But while damages to Wall Street are easy to show, this corruption, though just as harmful, is much harder to prove.
Starting a decade ago, a small group (ten or less) of campaign consultants like the Parkside Group began to function as lobbyists specializing in obtaining City Council funding. From 2002 to 2006, Parkside Group made over $7 million dollars by lobbying for over 40 non-profits that were funded by member items and developers who force their projects on unwilling communities. This new class of power players not only influences policy, which they are supposed to do as lobbyists, they are actually choosing the government officials who will then turn around and act on behalf of clients whose interests firms like Parkside represent. (footnotes: 1, 2, & 3) (www.parksidegroup.blogspot.com/)
Campaign operatives took on the role of lobbyists after ethics rules issued after the Koch scandals in the Parking Violations Bureau—which involved two of the five county leaders—boxed out party leaders and elected officials (except Anthony Seminerio, one of your new targets, Mr. Garcia) from profiting, at least directly, from those doing business with the City.
It what can only be described as local triangulation, the combining of the campaign consultant and lobbyist has had a chilling effect on independent politics, reform and the will of the people. The city’s elected officials, wealthy establishment and lobbyist-consultants have all joined together to ignore the choice of the people to have the system of two term limits that they voted for twice in the last 15 years. With the efficiency of the Soviet Union they have sent independent political leaders to Siberia. And some, like me, have even met worse fates. Only a new municipal corruption scandal will galvanize the public pressure necessary to update the City’s ethic rules to regulate these new super lobbyist-consultants and give the citizens of New York back their government and democracy.
Why Term Limits Exist
Term limits, the most important government reform in the modern history of New York City, were instituted in 1987 after then-U.S. Attorney Rudy Giuliani convicted lobbyists and government officials for turning the Parking Violations Bureau into a “racketeering enterprise.” Giuliani proved that City commissioners loyal to Queens Borough President and Democratic Leader Donald Manes permitted Bronx County Leader Stanley Friedman and his business partners to win a $22 million contract for a company called Citisource to build a hand-held computer for parking meters, even though Citisource had no assets, no employees, and not a single computer.
The public’s vote in two separate elections for limiting City officials to two terms was a response to then-Mayor Koch conspiring with the Queens and Bronx Democratic County Leaders to shake down a City agency in return for their support for Koch’s election and reelection bids. The term limit reform theory was that turnover in elective office would prevent future takeover of city agencies. What the reformers did not foresee was the creation of lobbyist-consultants and their subsequent alliance with the county leaders and elected officials to centralize power and take over the entire City government..
In 1984, I wrote an editorial in a small newspaper I managed called Talking Turkey, which uncovered the corruption inside the Parking Violations Bureau. At the time, my story was ignored for two years by the City’s press until Queens Borough President Manes attempted suicide on the eve of his indictment by Giuliani. It is creepy that over 24 years later, despite clear anecdotal evidence, knowledge of a corruption investigation by your office and the hiring of criminal lawyers by present and former Council leaders, the member item corruption story is still being ignored by the press. I wrote the Parking Violations editorial at that time because the mainstream media was ignoring government corruption in the city. Two decades later, amazing as it may see, I am publishing this government corruption story on a blog, because we have an even more oppressively controlled media in this town than we did then. (footnote: 5)
Hoist Them By Their Own Petard:Member Items
The reason the Council Members hired lawyers right away is because they know you have two atomic bombs in your hand, Mr. Garcia. What would be more fitting than to use the member items which the Council Member’s now use to ensure their reelection, to catch consultants/lobbyist in a conspiracy to rip off from the rip off (member items). While he continues to wait for his sentencing, former Queens Assemblyman Brian McLaughlin could offer great insight into how his former chief of staff Evan Stavisky operates the Parkside Group. Evan Stavisky, son of Queens State Senator Toby Ann Stavisky, is one of the partners in Parkside Group. Since McLaughlin teamed up with Stavisky to cut themselves into the county machine, leading to the success of the lobbyist-consultant operation, it is fair to reason after reading your indictment of Mr. McLaughlin that the Assemblyman micromanaged and took a piece of everything he was involved in. McLaughlin even paid Parkside to lobby for the Central Labor Council, when he was the Labor Council’s president. It is a slam dunk that McLaughlin can do more to break up the monopoly that secretly operates New York City than Frank Lucas did for breaking up the corruption in the NYPD narcotics squad in the 70’s. (Footnotes: 1, 5, 6, 7 & 8)
Parkside’s former President Harry Giannoulis helped Gifford Miller become speaker in 2002 and also assisted him in picking his chief of staff. Giannoulis quietly left Parkside several months ago. (footnotes: 9&10)
We know according to Citizens Union that several political consultants like Parkside took on a second role as a lobbyist when Gifford Miller became speaker. Dick Dadey, executive director of Citizens Union, a nonprofit civic group that has no budget request before the city, said the competition for money among nonprofits had "created this frenzy" to hire lobbyists out of a belief that doing so would increase their chances of securing appropriations. He also expressed concern about what he called "a growing problem" of council members being lobbied by firms that serve as political consultants to many of them. "It's a closed circle of influence that is totally inappropriate," Dadey said. (footnotes: 1, 11 &12)
What Else Did Fast and Loose Speaker MillerDo With the Public’s Money?
We know according to a report by the Comptroller that Speaker Miller played fast and loose with the city’s budget and rules. An audit charged that Miller split $1.67 million into several smaller contracts to avoid competitive bidding requirements for a mailing that touted the Speaker’s accomplishments. (footnotes: 13 &14)
We know that Miller combined fundraising and lobbyists to work together to benefit his campaign for mayor in 2005. City Council Speaker Gifford Miller's fundraising effort for mayor operated for 15 months in an office that housed the same lobbying firm that was also working on his campaign for Mayor. (footnotes: 13, 14 & 15)
Who made the decision in the Council’s finance office on who got member item funding? Did certain lobbyists get preferred treatment?
The second bomb in your hands is Councilman Kendall Stewart’s former chief of staff, Asquith Reid, who, like McLaughlin, has also become a customer of yours. Reid's attorney told a Manhattan federal judge Friday that he has no plans to go to trial on charges that Reid embezzled more than $145,000 in public funds. He faces more than 80 years in prison for allegedly stealing the cash from tax money Stewart allocated over three years to the Donna Reid Memorial Education Fund, a nonprofit group. The indictment said employees in the New York City Department for the Aging initially rejected the group's application for city money in 2004 after noticing that its office address was identical to Asquith Reid's home address. The group then reapplied for city funds through the New York City Department of Youth and Community Development. That request was granted. Some of the money passed through fictitious groups created by the City Council before being awarded to the fund. (footnotes: 16, 17)
City Council Finance Committee Chair (and New York City Comptroller candidate) David Weprin said these “fictitious groups,” never came before his committee or the Council as a whole – it was merely the work of a “couple of staff people.” (footnote: 18)
An Open Secret?
For the six years Council Speaker Christine Quinn served on the Council prior to the discovery of the slush fund scandal, where did Speaker Quinn and the other Council Members think they were getting the money to fund additional nonprofits after the passage of the annual budget? Friends and co-workers of two former City Council staffers accused of disobeying orders to scrap a phantom budget system fumed that they're being scapegoated. The two, Michael Keogh and Staci Emanuel, left after Council Speaker Christine Quinn said they ignored instructions to stop reserving millions of taxpayer dollars under the names of fictional organizations so the funds could be dispersed later to genuine nonprofit groups. The Speaker’s finance director, Michael Keogh, immediately joined Bolton-St. Johns, the second most successful lobbying firm in the City. Mr. Keogh is already listed on the City’s database as the contact person for the non-profit High Line, which this year received $290,000 in member item funding from the slush fund, sponsored by Speaker Quinn.
City records show Friends of the High Line also received $290,000 from the Council for borough needs in 2005 and 2006 and millions more from the capital budget. It is not know if Quinn was the sponsor of these funds or if these funds also came from fictitious nonprofits, because until this year, sponsors weren’t publicly listed on member items. It is still a secret who the sponsors of the much larger capital budget contracts are. What is known it that Friends of the High Line has contributed more than $50,000 to Quinn and $60,000 to Miller since 1999.
The New York Times called the member items hidden in the fake nonprofits “Potemkin Accounts”. The Times editorial from April 5th, 2008 said: “The device was apparently designed to allow the City Council speaker to hand out funds for pet projects throughout the year, getting around a requirement to allocate money at the start of the fiscal year. While it does not seem as if the public’s money was spent illegally, it does seem likely that political favors were bestowed without accountability… Quinn says she was disobeyed when she ordered her staff to stop stashing ghost funds last spring (two top finance aides later departed for undisclosed reasons). She says she tried to stop the phony allocations, something her predecessors, Peter Vallone and Gifford Miller, did not do. But she was oddly ineffectual.” What the Times did not address was how Miller’s policy of creating fake nonprofits to park member item funds not only continued, but the number of made-up organizations in the budget doubled after Quinn became Speaker and replaced the previous financial director and 40% of her staff. “Finally, last fall,” the same Times editorial continued, Quinn “alerted the United States attorney’s office and the city’s Department of Investigation, who were already examining other council-related finances. That action was late in coming.” The Times called for a “full investigation”. We fully agree. (footnote: 19, 20, 21, 22 & 23)
Spin Masters Replaces Service and Influence Network
These new “lobbyist-consultants” have risen to a level of power that rivals old-time Tammany leaders like Carmine DeSapio. But what makes these campaign consultants different—and more dangerous—is that they are beholden to no one. The old political machines needed to provide services to working families, because they depended upon their vote to survive. Lobbyist-consultants, on the other hand, rely on spin, polls and special interests to keep the money flowing in for their summer homes in the Hamptons
From Angry New Yorker to Disconnected Wimp
The old machine’s network operated from the bottom up giving the average Joe a voice, the spin masters have destroyed that system and changed the culture of government. Today New York’s government has become a Potemkin Village controlled by insiders, blocking everyman’s influence and ability to pressure government for there needs.
Local district attorneys, who rely on the same lobbyists-consultants and local elected officials for their reelection campaigns, conveniently look the other way on this type of insider trading. Even the city’s Conflict of Interest Board retreated under pressure from lobbyists when they tried in 2005 to restrict lobbying of elected officials by consultants who work on their campaigns. Only a U.S. Attorney has the independence to prosecute the racketeering scam that is pretending to be our government. (footnote: 4)
The future of New York City is in your hands,Mr. Garcia
All New Yorkers
Getting help to end government corruption is as difficult as President McKinley’s efforts to win the Spanish American War by sending a messenger with a letter in 1898 to seek the help of rebel leader General Garcia hiding in the mountains of Cuba.
Dedicated to Jack Newfield, the father of modern investigative journalism in this town
Sidebar News Articles . . .
1. We know the Parkside Group was formed around the 2001 election“In Queens, the Parkside Group leads the newcomers in attracting candidates. Evan Stavisky, Bill Driscoll and Harry Giannoulis bring their years of political experience together to represent dozen-plus odd Council candidates.” -Queens Tribune, July 12, 2001
2. We know that Parkside took in 7.5 Million from 2001 to 2006"As the city examines the power that lobbyists exert on municipal government, new figures show the top influence-peddlers are hauling in big bucks. According to a list compiled by the Citizens Union and obtained by The Post, the Parkside Group is the city's top-billing lobbying or consulting group, having earned $7.5 million in fees since 2001." -New York Post, February 3, 2006
3. Top Lobbyists
New York Observer, June 7, 2007 The City Clerk’s office just put out its annual report on lobbying. Here are the Top Ten Lobbyists for 2006: Kasirer Consulting Revenue: $3,020,645.79, Bolton St. Johns, Inc Revenue: $2,462,786, Parkside Group Revenue: $2,358,950, Greenberg Traurig Revenue: $2,233,433.34, Law Offices of Claudia Wagner Revenue: $2,162,200, Kramer Levin Naftalis & Frankel LLP Revenue: 41,857,925, Constantinople Consulting Revenue: $$1,649,500, Connelly McLaughlin Revenue: $1,418,900, Geto & De Milly, Inc. Revenue: $1,323,996, Yoswein New York, Inc. Revenue: $1,187,000
4. Conflicts of Interest Board Rescinds Memo on Lobbying“Under pressure from lobbying-and-consulting firms, the city's Conflicts of Interest Board has backed away from its first attempt to restrict lobbying of elected officials by consultants who work on their campaigns. The board caused a stir in political circles in January when it issued a memo reminding municipal employees of the ethical rules for taking part in campaigns, which included a new admonition against lobbying by political consultants. It said consultants hired by public officials “may not lobby or in any other way communicate” with those officials on behalf of private clients. . . The Parkside Group, for instance, has worked on the campaigns of more than a dozen City Council members, including the speaker, Gifford Miller, and has also lobbied the Council on behalf of private clients. . . .Mr. Rosenkranz (lawyer hired to represent lobbyist against the conflict of interest board) declined to say which lobbyist-consultants he was representing, although others involved in the case said Parkside was among them.” –New York Times, March 3, 2005
5. We know that Speakers Miller and Quinn and the rest of the City Council have hired criminal lawyers to represent them“Gifford Miller, the former City Council speaker, has hired a criminal defense lawyer to represent him in a federal investigation into the Council’s longstanding practice of allocating millions of dollars to phantom nonprofit groups, people involved in the case said on Friday. The Council, which had hired a criminal lawyer to represent itself in the inquiry by federal prosecutors and the City Department of Investigation, recently hired another one to represent staff members who were being questioned, several of the people said. The two lawyers, along with a third criminal defense lawyer representing the current speaker, Christine C. Quinn, are being paid with city funds; Mr. Miller’s lawyer, Henry Putzel III, is not.” –New York Times, May 17, 2008
6. The Press should be Reading the Press and Connecting the Dots About eight years ago, Brian McLaughlin and his former chief of staff Parkside’s Evan Stavisky went on an attack against the leaders of the Queens organization. There were a series of newspapers articles in the New York Sun claiming that all the leaders lived on Long Island. The late Thomas Manton and his co-leaders in the Queens organization did what they always do to avoid trouble: made a deal to combine forces with McLaughlin and Stavisky.
7. We know McLaughlin took a piece for himself of everything he was involved in“The former head of the nation’s biggest municipal labor council painstakingly detailed years of thievery from his own union and the state on Friday as he pleaded guilty to racketeering charges in federal court in Manhattan.” The thievery included stealing $95,000 from Little League baseball teams to pay his rent, to stealing from own his labor union, to brazenly creating two no-show jobs on his legislative payroll and keeping part of one of their salaries. – New York Times, March 8, 2008
8. We know that McLaughlin is in cooperation with the U.S. Attorney to reduce his prison sentence“Disgraced ex-lawmaker and union boss Brian McLaughlin is a secret witness in an FBI probe that led to Wednesday's arrest of a Queens’s pol on influence-peddling charges, the Daily News has learned. The ongoing investigation - which featured an undercover FBI agent trolling the Assembly floor for corrupt pols - has snared its first collar: Assemblyman Seminerio (D-Ozone Park). Sources familiar with the investigation said McLaughlin, a former assemblyman who pleaded guilty to bribery charges and faces up to 10 years in prison, is cooperating in the probe.” –New York Daily News, September 10, 2008
9. We know that The Parkside Group’s President Harry Giannoulis helped Gifford Miller become Council Speaker "Gifford represents a completely new paradigm," said Harry Gianoulis [sic], a consultant who helped coordinate Mr. Miller's campaign for Speaker. "It's consistent with the way that all of these new guys think that he took a multi-track approach and tried to talk to everyone, instead of saying 'I've got Queens and the Bronx' and ignoring everything outside that target audience. He started early with his campaigning, and he didn't make enemies. The old model doesn't work anymore, where you sit on your ass and wait for a county leader to pick you." –The New York Observer, Jan. 13, 02
10. Miller got help from Parkside’s lobbyist in finding his new chief of staff and that Parkside is getting paid from both sides"The position is traditionally that of gatekeeper and top adviser to one of the city's most powerful officials. . . The lobbyist, Harry E. Giannoulis, a partner in the Parkside Group, a lobbying and political consulting firm, said yesterday that while he did not believe he had played a pivotal role in helping Mr. Miller choose his chief of staff, he had given the speaker advice on what to look for in a candidate and had advised some potential applicants to seek the job. He also participated in meetings at which candidates were discussed, according to Mr. Miller's staff. Mr. Giannoulis wears two hats, one as a consultant helping candidates get elected, another as a lobbyist, who then helps his clients gain access to the people he helps elect. It is a standard strategist-lobbyist model that is common in the city and in the federal government. In this case, Mr. Giannoulis acknowledges wearing both hats at the same time -- saying he is collecting a $2,000-a-month retainer from Mr. Miller's campaign committee for political work while also representing clients like the Telebeam Telecommunications Corporation of Long Island City, which owns pay phones throughout the city." -New York Times, May 18, 2004
11. Good Government: Citizens Union reported lobbying firms were created to do work in Miller’s Council “More political consultants in New York have taken on the second role of lobbyists over the last five years, prompting good-government advocates to press the city's ethics board to revive attempts to regulate the practice. An analysis by Citizens Union, a nonprofit policy group, shows that half of the top 10 consultant-lobbyists last year earned no money from lobbying in 2001, but gradually adopted the practice, sometimes lobbying the same public officials they helped elect. Altogether, those 10 firms earned $32 million from lobbying and consulting from 2002 to 2005, according to the analysis, which the group intends to present today to the Conflicts of Interest Board.” -NY Times, Feb. 3, 06
12. We know the lobbyist consultant role at City Hall is Inappropriate"Dick Dadey, executive director of Citizens Union, a nonprofit civic group that has no budget request before the city, said the competition for money among nonprofits had "created this frenzy" to hire lobbyists out of a belief that doing so would increase their chances of securing appropriations. He also expressed concern about what he called "a growing problem" of council members being lobbied by firms that serve as political consultants to many of them. "It's a closed circle of influence that is totally inappropriate," Mr. Dadey said. -New York Times, June 22, 2005
13. We know Miller played fast and loose with the city’s budget and rulesThe City Council played fast and loose in awarding $1.67 million in printing work under former Speaker Gifford Miller, a city audit charged yesterday. The report said competitive bidding requirements were skirted by splitting big contracts into several smaller ones that didn't reach the $5,000 bidding threshold. Initially, his office had reported mailing only 100,000 flyers, which featured Miller and touted the Council's budget positions, at a cost of $37,000. But a few days later, Miller aides admitted 5.5 million flyers had been mailed at a cost of $1.6 million. –Daily News, September 22, 2007
14. We know Miller’s combined fund-raising and Lobbyists worked together to benefit his campaign for mayor in 2005"City Council Speaker Gifford Miller's fund-raising effort operated for 15 months in an office in the same lobbying firm that reportedly has advised him on selecting a new chief of staff. The executive director of Miller for New York, Lisa Esler, rented an office from the Parkside Group since February 2003 before relocating to another floor in the same Nassau Street building three weeks ago. Ms. Esler and aides to Mr. Miller said the space was rented by her consulting firm, The Esler Group, and not the campaign, although Miller for New York is paying for the new office, the aides and Ms. Esler said." - New York Sun, May 19, 2004
15. The Miller campaign for mayor paid Parkside for fundraising from 2002 to 2205 –Campaign finance website
16. Indicted former council staffer knows . . . The indictment said employees in the New York City Department for the Aging initially rejected the group's application for city money in 2004 after noticing that its office address was identical to Asquith Reid's home address. The group then reapplied for city funds through the New York City Department of Youth and Community Development. That request was granted. Some of the money passed through fictitious groups created by the city council before being awarded to the fund. –Daily News, April 16, 2008
17. And is Talking!A former top aide to Brooklyn Councilman Kendall Stewart is negotiating a plea deal with the feds in the hopes of avoiding prison. Asquith Reid's attorney told a Manhattan federal judge Friday he has no plans to go to trial on charges that the former chief of staff embezzled more than $145,000 in public funds. Reid, 64, faces more than 80 years in prison for allegedly stealing the cash from tax money Stewart allocated over three years to the Donna Reid Memorial Education Fund, a nonprofit honoring the memory of Reid's late daughter. Reid has alleged he put the $145,000 back into the charity. –Daily News, September 12, 2008
18. Council Finance Chair claims two staff workers controlled member items slush fundsIn an appearance last night on the Perez Notes radio show, Council Finance Committee Chair (and comptroller candidate) David Weprin said the Council slush fund incident, was a minor blip. These “fictitious groups,” Weprin said, never came before his committee or the Council as a whole – it was merely the work of a “couple of staff people.” - Daily News Blog, July 31, 2008
19. What was going on in the Council Finance Office?Friends and co-workers of two former City Council staffers accused of disobeying orders to scrap a phantom budget system fumed yesterday that they're being scapegoated. The two, Michael Keogh and Staci Emanuel, left after Council Speaker Christine Quinn said they ignored instructions to stop reserving millions of taxpayer dollars under the names of fictional organizations so the funds could be dispersed later to genuine nonprofit groups. "Staci is the consummate professional," one former co-worker told The Post. "She's totally honest. She'd never ignore an order like that. For her to be vilified publicly is not right." Keogh, the council's former budget director, and Emanuel, his deputy, have both refused to talk to the press. –NY Post, April 5, 08
20. Former Council financial director who now works at one of the city’s top lobbyists firms, says he is cooperating with investigators "Her finance director, Michael Keogh, has since joined Bolton-St. Johns, a lobbying firm where Emily Giske, a top official in the state Democratic Party and close ally of the speaker, also works. Quinn’s communications Chief Jamie McShane said the speaker played no role in Keogh landing that job, and Keogh has told reporters he is cooperating with investigators.” -Daily News Blog, July 31, 2008
21. From the Council Finance Committee to Lobbyist Michael Keogh is listed as Bolton-St Johns lobbyist in a contract with the High Line non profit which according to news report received member items funds, even some funding from the fake non profits. –NYC Lobbyists Database
22. Quinn: “We Went Back and Fixed It”The Friends of the High Line - a pet project of former City Council Speaker Gifford Miller - received more money than any other group from the phantom accounts squirreled away by the council last year, records released yesterday showed. Council Speaker Christine Quinn said the High Line was originally allocated the funds during the budget process, but was mistakenly left high and dry when the final list of grants was issued. "This was just a clerical error," she said. "We went back to fix it." –NY Post, April 4, 2008
23. Quinn Replaced Finance Director and most of his staff “Michael P. Keogh will become the Council's new finance director, with primary responsibility for negotiating the city's $50.2 billion budget with the Bloomberg administration, Council aides confirmed. Mr. Keogh will replace Larian Angelo, the longtime finance director, who was fired along with 17 of her staff members, or roughly 40 percent of the budget department.” –New York Times, February 18, 2006