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Bloomberg downplays slush fund scandal

By David Freedlander, amNewYork Staff Writer
More stories | dfreedlander@am-ny.com

May 2, 2008

Mayor Michael Bloomberg sought yesterday to downplay the slush fund scandals that have gripped the City Council and are threatening to embroil Speaker Christine Quinn.

"To use fake names was wrong," the mayor said. "But in the end no monies were ever sent to any fake organizations. It was purely a placeholder and then changed to real organizations which met with the same screening process.Did anybody send money out that they shouldn't have? They did not."

Last month it was reported that Quinn's office allocated money to fictitious nonprofits as a placeholder to disburse the money throughout the year. It has also been reported that some council members allocated money to bogus groups in their neighborhoods. In some cases the nonprofits had relatives of council members on their payroll. Two aides to Councilman Kendall Stewart (D-Brooklyn) have been indicted for skimming $145,000 to bogus nonprofits and the investigation threatens to grow.

"It's not perfect," the mayor acknowledged, before adding, "For a $2,000 grant you just can't do $10,000 worth of investigationI think they have the balance roughly right."

The mayor also said that while it was wrong to set up the bogus names, New Yorkers should be assured that the speaker's office eventually sent that money to legitimate organizations.

But good government groups took issue with the mayor's remarks.

"People who have been following the budget process for many years had no idea about this," said Gene Russianoff, a spokesman for the New York Public Interest Research Group. "It's budgeting to create fake organizations and leave the money there with the goal of circumventing safeguards. The comptroller, the mayor, and the speaker all have to take responsibility for this."