Is Schneiderman Giving a Pass on Possible Illegal Lobbying on Redevelopment Effort Favored by a Major Donor?

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An alert reader pointed to a new post by Norman Oder, who has been following the so-called Atlantic Yards project, a $4/9 billion proposed “redevelopment” for part of Brooklyn proposed by Bruce Rattner of Forest City Development.

What caught his eye was that Schneiderman had secured a settlement from three groups, one New York City’s “economic development agency” and two local development corporations. This triumverate was pushing local legislators to support development projects in Willets Point in Queens and Coney Island in Brooklyn.

What’s wrong with that? The Wall Street Journal explains:

Local development corporations are nonprofit organizations that can acquire land from a municipality without public bidding, and they are commonly used in major public projects. While technically separate from government, their political independence varies widely. They are banned from lobbying.

This is also a poke in Bloomberg’s eye, since they were pet initiatives of his. Schneiderman takes a victory lap:

“These local development corporations flouted the law and lobbied elected officials, both directly and through third parties,” Attorney General Eric Schneiderman said in a statement.

But Oder raises the question: why didn’t Schneiderman also pursue the Downtown Brooklyn Partnership, which operates in pretty much the same manner? Might it have something to do with the $12,500 that Rattner gave to Schneiderman’s 2010 campaign?

From Oder:

…there was no mention of seemingly similar activities by the Downtown Brooklyn Partnership, which lobbied the city for the Downtown Brooklyn rezoning and the state for approval of Atlantic Yards. As a 10/28/09 New York Times article stated:

Mr. Doctoroff was determined to do better, through a local business group, the Flushing-Willets Point Local Development Corporation, which received half its money from the city. But about half the group’s money was spent doing something not allowed under state law: lobbying city officials. The group’s lobbying, has led to an investigation by the attorney general’s office.

That investigation has expanded into the activities of the Downtown Brooklyn Partnership, which the city helped create in 2006 to help push through development plans following a broad rezoning of the area.

The city awarded the group a $6 million three-year no-bid contract. The group raised another $1.1 million in private donations, tax records show. And Mr. Doctoroff installed a top aide, Joe Chan, to run it. The partnership has become a key voice for the development of Downtown Brooklyn, inserting itself, critics say, into the debate over a plan to build a Nets area and high-rises at the Atlantic Yards. It has spent some $200,000 on lobbying expenses. Councilman Lewis A. Fidler complained last year that the partnership was using public funds to promote Bloomberg’s congestion-pricing plan.

I queried the Attorney General’s office yesterday about whether the Downtown Brooklyn Partnership had been given a clean bill of health (and, if so, why), or whether an investigation was continuing. I didn’t get an answer.

It’s difficult to see how the DBP, which is a not-for-profit local development corporation, does not, like the other entities named, fall under section 1411(c) of the Not-for-Profit Corporation Law, says no “such corporation shall attempt to influence legislation by propaganda or otherwise.”

The Downtown Brooklyn rezoning aftermath involves legislation, and the Atlantic Yards plan involved legislation, such as the city and state approvals of budgets containing subsidies. And if “legislation” is broadly seen as government approval, well, the DBP’s Joe Chan, and board members, testified regularly at Atlantic Yards hearings…

We still don’t know cause and effect, but Schneiderman owes the public an explanation of why the DBP was excluded.

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  1. anonym

    So this was the guy who supposed to fight against mortgage-settlement/banks/bankers ?

    I actually was hopeful few months ago about him…what a disappointment.

    Will anybody ever go to jail for 2008 Financial crash that led to millions of people loosing houses and indirectly retirement/pensions down the drain.

  2. David

    This is silly. The NYCEDC is a local development corporation (LDC), a non-profit with a special relationship with government, qualifying it as a type of local authority under nYS law and placing certain obligations on it. The Downtown Brooklyn Partnership is a purely private nonprofit and can lobby whenever it likes under the limits of federal tax law and disclosure. The list of LDCs is here:

    1. Gambino's cigar

      Good to know that trading in influence and abuse of function as defined in the Convention Against Corruption is A-OK under the laws of your third-world pismire of a city.

      1. Nathanael

        It does explain why Schneiderman isn’t going to take the case on: this is a case of “influence peddling is legal here”, so there’s not much he can do as Attorney General.

    2. Ms G

      Define “purely private nonprofit.” Who is on the Board? Who funds it? Who does it work with/for? Who’s idea was it to set it up in the first place and for what purpose? The disingenuousness in your comment is so off the charts as to make one wonder whether you might not be a . . . troll?

      1. Ms G

        This Downtown Brooklyn Partnership outfit sounds like City Hall’s and other City Agencies’ go-to “expediter” for big ticket RE development projects:

        “The Partnership works in close coordination with the Mayor’s Office and other City Agencies to expedite the design and construction of nearly $200 million in capital projects.”

        One wonders what percentage of DBP’s private nonprofit income derives from sources Other Than “the Mayor’s Office and other City Agencies”? (Assuming of course, that DBP does not provide its services pro bono publico.)

        Superficially at least DBP sounds like it is paid by the City precisely to “lobby around” in re City pet real estate + business projects.

        Other than a few names given on the website, one is instructed to download a PFD or Word document for a full list of persons on the Board of Directors. Hate when that happens!

        1. enouf

          You especially might like to know about these sites, if you don’t already;


          (i’m sure you’re already aware of


    3. enouf

      … special relationship with government …

      Gotta love these eh?

      Anyone know what kind of autonomy and unchecked power entities such as the NY TBTA (Triborough Bridge and Tunnel Authority) has? Don’t bother looking – you already know the answer.


  3. Norman

    Never ceases to amaze me, how public officials will sell out, as in political bribery, especially on the cheap. Nor, the snycophants in the shadows ready at a moments notice, to defend such behaviour.

  4. Lloyd C. Bankster

    Dear Schneiderman,

    My children are still laughing at how you entertained them last week, disguised as the aging ballerina Olga Chernonenkov, an obese mustachied Latvian dressed in a pink Tutu ornamented with leafage.

    It was hilarious when you made your appearance on the back of the elk Sladki, as the good-natured beast trudged across the boards of my children’s playroom, then when you assumed your first position for “The Nymph’s Dance”.

    And when you began that series of rapid turns beneath the stiff folds of your tulle skirt, your monstrous legs molded by pink clinging tights, and performed your practiced task with enough agility and remnants of grace to inspire justifiable surprise.

    Until that unfortunate moment when you were crossing the stage with tiny steps, both feet raised onto the point of their big toes and you fell heavily and cried out in anguish.

    The doctors tell me you’ve been immobilized by a muscle cramp and so here’s wishing you a speedy recovery.

    My children can hardly wait for your next performance dressed as Czar Alexis of Russia!

        1. Lloyd C. Bankster

          Good one!

          But they’ve got the picture labeled wrong. Instead of “half man, half horse, all D&D nerd”, it should be:

          “Eric Schneiderman, Progressive Hero”

    1. James Cole

      It’s a coincidence in the sense that Barclays did not use its magic LIBOR manipulation powers directly to obtain naming rights to the stadium but it’s no coincidence that they have the juice generally to buy things like that.

      1. Ms G

        Indeed. And NYC is bank-friendly capital of the USA. Barclay’s stadium, Citibank bike-share program, JP Morgan police-charity. Actually it creates a transparency of sorts: you can’t go anywhere in this city without seeing the emblems of bank-ownership of the city!

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