Perdido 03

Perdido 03

Monday, February 15, 2010

Rubber Room For Corrupt Politicians: Bloomberg, Malcolm Smith Edition

It's good to be connected.

The NY Daily News reports this morning
that three charter schools with connections to Mayor Bloomberg or State Senate President Malcolm Smith are receiving a nice financial hug and kiss this post-Valentine's day:

Three politically connected charter schools are expected to receive millions in city money for new buildings, an Education Department plan shows.

In the city's capital plan, two charter schools with ties to Mayor Bloomberg - Brooklyn's PAVE Academy and Harlem Promise Academy - are slated to receive a total of $72 million for new buildings, about a third of the city money available for charter construction.

Peninsula Preparatory Academy in Queens, which state Senate President Malcolm Smith helped found, will also receive funds, though an exact amount has not been settled on.

Critics say with limited resources for school construction, the city should build public schools where they're most needed - not where elected officials have pet schools.

"It pays to have friends," said Community Education Council 15 Co-President Jim Devor, criticizing the choice to spend public dollars on a new school for Red Hook, Brooklyn, which doesn't have an overcrowding problem.

"You have a neighborhood whose school facilities are underutilized. You gratuitously add a school building where none is needed."

The Promise Academy school is run by education reform "hero" Geoffrey Canada and may constitute a quid pro quo bribe between Bloomberg and Canada.

Canada loudly supported Bloomberg's efforts to maintain mayoral control of the New York City public school system last summer when the law was up for renewal.

Now he's receiving a new school building courtesy of Mayor Bloomberg and city taxpayers at the expense of school children and parents in other areas of the city that suffer from school overcrowding.

City Controller John Liu and Public Advocate Bill De Blasio need to look into just how it is that Geoffrey Canada's school, along with the other politically connected charters, got NYCDOE largesse at a time when funds for school construction are so limited.

As for Malcolm Smith, the Daily News reported last month that he steered $100,000 dollars of state aid to the charter school he helped found, Peninsula Preparatory Academy.

While steering the money toward the charter school he founded is not illegal, it does raise questions of a conflict of interest for Smith. What may be illegal are the political donations Smith received from the for-profit company, Victory Schools Inc., that runs the charter.

The owner of Victory Schools Inc., Steven Klinsky, denied there was any quid pro quo arrangement between his company and Smith and said the donations were simply to reward Smith for supporting raising the charter school cap, but the deal certainly smells bad on the face of it.

Adding to Smith's woes, the NY Times reports this morning that Smith and some of his aides are being investigated by federal prosecutors in both Manhattan and Brooklyn for money transfers between Smith and non-profits he has ties to:

Four current or former officials of a Queens nonprofit group or a related charity founded by State Senator Malcolm A. Smith and Congressman Gregory W. Meeks — a group to which Mr. Smith has directed some $56,000 in state funds — have spent some time on the Senate payroll working for Mr. Smith, and two were among his highest paid staff members, public records show.

Federal prosecutors are investigating the nonprofit group, the New Direction Local Development Corporation, and a related charity set up to aid victims of Hurricane Katrina, and they issued a subpoena at the beginning of February for records from Mr. Smith’s Senate office that show all the money he had directed to community groups over the past decade, a person with knowledge of the subpoena said last week.

But while the prosecutors who issued the subpoena, from the United States attorney’s office in Manhattan, wrote it broadly, the person said that investigators made clear that they were focused on New Direction, which was incorporated in 2000 and says in its tax filings that it was created to encourage local development in Southeast Queens.


It is unclear whether the investigation by Manhattan prosecutors, which is in its earliest stages, or another apparently associated inquiry by federal prosecutors in Brooklyn, are related in any way to the activities of the four people who spent time over the years on Mr. Smith’s legislative payroll. No charges have been filed, and the United States attorneys’ offices in both Manhattan and Brooklyn declined to comment on Sunday.

But three of the four people who either are or were on Mr. Smith’s payroll appear to have played major roles in the nonprofit group over several years, according to its tax filings and Web site, and two hold posts that suggest they are or were close to Senator Smith or are deeply involved in his political affairs.

Connections between the lawmakers who make grants and the nonprofit groups that get them have come under growing scrutiny from prosecutors in recent years, especially in connection with the State Legislature and New York City Council, which together give out tens of millions of dollars in local awards each year.

There is no law prohibiting a state legislator from directing a grant to a charity that employs or has on its board a friend, family member or staff member of the legislator’s. But under an agreement with Attorney General Andrew M. Cuomo in 2007, the recipient of any grant, often known as an earmark, must disclose such connections in a signed statement, under penalty of perjury.

Smith's mentor, Reverend Floyd Flake, is also embroiled in a quid pro quo scandal involving the awarding of a gambling contract to a company connected to him by the state. After Flake's company won the bid, Flake pulled back from his public support of Andrew Cuomo in this year's Democratic primary for governor and says he may now support David Paterson, the man who helped his company win the gambling contract.

Finally the Daily News reports that Mayor Bloomberg bought a political crony a house in Forest Hills Garden for helping Bloomberg win his third term as mayor.

The scandals involving New York City and New York State political figures - from Bloomberg to Smith to Flake to Paterson - are coming fast and furious.

It is clear these people think state and city coffers are their own and any taxpayer funds they steer toward their own non-profits or the non-profits run by their supporters or to companies run by supporters are just the spoils of office.

It is also clear that quid pro quo deals are daily occurrences at City Hall, at Tweed, and in Albany.

Maybe there needs to be a rubber room for corrupt politicians where Bloomberg, Paterson, and Smith can languish for months on end while prosecutors investigate their cases.

And maybe there needs to be a rubber room for non-profit operators and charter school management company operators like Geoffrey Canada and Steven Klinsky of Victory Schools, Inc. involved on the other end of quid pro quo dealings


  1. Canada's certainly earned it, having chaired Bloomberg's propaganda campaign last year, the one that was secretly funded by Bill Gates.

  2. This web of corruption just keeps growing and growing. And, you could feel the beginning of it last spring and summer when there was such silence on term limits and mayoral control renewal. Current state and city politics are just about rotten to the core.