| Calls for Discretionary Funding Reform Follow Council Member’s Indictment |
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| Wednesday, 10 February 2010 11:21 |
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Yesterday was a rough day for State and City officials facing legal problems. In addition to Hiram Monserrate’s expulsion from the State State, City Council Member Lawrence Seabrook was indicted by the U.S. Attorney on charges revolving around his use of Council discretionary funds to finance a string of nonprofit groups that city and federal authorities say ultimately did little for the communities they were supposed to aid. Department of Investigation Commissioner Rose Gill Hearn used the opportunity to call for further reforms to the City’s discretionary funding system.
“It is extraordinary to be here to announce the investigation and indictment of a New York City Councilmember, only seven months after the last arrest of a Councilmember, both of whom were charged with abusing their offices in various ways, including the abuse of discretionary funds,” said Gill Hearn, who used the opportunity to call for further reforms of the City Council’s discretionary funding system.
Gill Hearn cited recent criminal cases brought against City Council Member Miguel Martinez and Asquith Reid, Chief of Staff COS to former Councilman Kendall Stewart, noting that “each of these cases has opened up a new window into the labyrinth of discretionary funding, including circumventions and conduits and Not-for-profits performing little or no work for the City money they received.”
The DOI Commissioner went on to say that while “safeguards have been implemented in the past two years… today’s indictment shows there were other ways to fly this money under the radar.” She urged that “oversight should be expanded to include all recipients and sub-recipients of discretionary funding, so the process is truly transparent from beginning to end and not obscured by conduits or intermediaries. Large discretionary funding grants should be placed under stricter guidelines to ensure the City is fairly appropriating the money and only to well-run, reliable NFPs. City money should only go to entities that are truly independent, unlike the case here where funding went to organizations Seabrook controlled and that supported his family and friends. Thus, there needs to be a stricter set of rules relating to funding organizations where there are potential conflicts. In sum, what is needed is total transparency, including who will end up with the money; funding organizations that are, on the merits, the best to serve the community, free of entanglements with the benefactor.”
Gill Hearn went on to call for “a dialogue about whether the process by which funds are allocated and selections made can be supplemented based on an objective system of review which could possibly make the money available to more organizations, with a competitive element, and at the same time, serve to eliminate the various corruption vulnerabilities we have seen repeatedly in these cases.” She suggested broader consideration of a model currently being used at the Department of Cultural Affairs that involves disbursement of grants to the nonprofit arts and cultural groups, through a peer-review, merit-based selection process.
And, lower down the food chain
Darley Estinval, a former Principal Administrative Associate (PAA) at the Administration for Children’s Services (ACS), was sentenced to 41 months in prison for participating in a scheme by which ACS checks to vendors were stolen, altered, and used to create and negotiate counterfeit checks through which banks were defrauded of more than $600,000.
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