Thursday, February 11, 2010

New York City Council chicanery knows know bounds: Slush fund scandal stretches beyond Seabrook

Thursday, February 11th 2010, 4:00 AM

(From l.) Migheul Martinez, Maria del Carmen Arroyo and Kendall Stewart
Smith, Seigel, Lombard for News
(From l.) Migheul Martinez, Maria del Carmen Arroyo and Kendall Stewart

The indictment of City Councilman Larry Seabrook on corruption charges is proof the Council's slush fund scandal is far from over.

City Investigation Commissioner Rose Gill Hearn, who has been looking into Council chicanery for three years, says "serious reform" is still needed, despite prior claims from Council Speaker Christine Quinn that everything was resolved.

Hearn noted that some of Seabrook's alleged crimes came after Quinn's clampdown — and that corrupt politicians always find "ingenious and audacious" new ways to steal.

The so-called slush fund is the Council's longstanding practice of letting members steer public money into favored nonprofits that are supposed to serve senior citizens, impoverished youth and other needy causes.

Starting in 2007, the city Department of Investigation uncovered a pattern of Council members steering money to groups controlled by their cronies or relatives.

Seabrook (D-Bronx) is a case in point. Prosecutors say he funneled more than $1 million to nonprofits he controlled to benefit his girlfriend, his brother, his sisters and his nephew. He has pleaded not guilty.

Here's a look at the ever-expanding slush fund scorecard:

* Former Councilman Miguel Martinez is serving five years in prison after admitting he stole more than $100,000 from nonprofits funded with discretionary funds, including one which employed his sister.

Martinez, who represented upper Manhattan, began looting the public coffers almost from the day he first took office in 2003, including pocketing taxpayer money meant for a children's art program.

* Two aides to ex-Councilman Kendall Stewart pleaded guilty to stealing $145,000 from nonprofits he controlled. Stewart, a Brooklyn Democrat, steered hundreds of thousands of dollars to the groups. He was not charged but lost a bid for reelection in November, partly because of the scandal.

* Richard Izquierdo, nephew of Councilwoman Maria del Carmen Arroyo (D-Bronx), was indicted for stealing from affiliates of several nonprofits. He has pleaded not guilty.

Arroyo and her mother, Assemblywoman Carmen Arroyo, have steered hundreds of thousands of city and state dollars into the nonprofits run by Izquierdo and the councilwoman's sister.

Izquierdo was charged with looting federal housing money through those same groups. Some cash paid for tropical trips for the councilwoman and the assemblywoman.

* Councilman Erik Martin Dilan (D-Brooklyn) sponsored $187,000 in taxpayer money for a nonprofit run by his wife. The Daily News exposed the arrangement and the funding stopped.

* Councilwoman Diana Reyna (D-Brooklyn) steered $25,000 to a puppet troupe called the Striking Viking Story Pirates co-founded by her sister-in-law. She also directed $6,000 to a senior citizens program that employs her mother-in-law. The money ended after The News exposed that practice.

* Councilwoman Darlene Mealy (D-Brooklyn) tried to steer $25,000 to her sister's nonprofit community group.

Two years ago, Quinn announced tougher scrutiny and pulled funding for dozens of dubious groups.

Still, nearly two years after then-Manhattan U.S. Attorney Michael Garcia warned the flush fund was "ripe for abuse," debate rages about whether the system is repaired.

Hours after busting Seabrook on Tuesday, Hearn talked of fixing the system with "an objective system of review" of nonprofits that would involve a "competitive element."

In response, Quinn's spokesman Jamie McShane praised the speaker's reforms, but added, "We agree with [Hearn's] statement that more can always be done."

gsmith@nydailynews.com

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