Taxpayers ask for inquiry on council slush funds

June 26, 2008 11:30:09 AM PDT
A taxpayer group asked a judge Thursday for an inquiry into the City Council's admitted allocation of public funds to nonexistent organizations, and its alleged funneling of the money to politically connected groups. Norman Siegel, the petitioners' lawyer, told state Supreme Court Justice Joan Lobis that, "at a minimum," it is illegal to falsely state where funding is going. He also said the practice has cast a pall over the council.

Since 2001, the council has appropriated some $17.4 million to nonexistent groups. Siegel said his clients want to know when it started, who started it, who participated and who knew about it, and where the money went.

"This isn't just pork. It's glazed ham," said Siegel client Philip DePaolo.

Siegel said council members who claim ignorance about the practice are derelict in their duties. "How do you pass a budget without knowing what's in the budget?" he said outside court.

City lawyer Stephen Kitzinger called the petition a "publicity stunt." He said these kinds of petitions, usually based on Section 1109 of the City Charter, often occur in the months before political elections.

Kitzinger also said the council's money policies are beyond the court's authority. He said the petitioners are in effect asking the court to investigate legislative political policies and the court does not have that right.

Council Speaker Christine Quinn, a likely mayoral candidate next year, has said the council's practice of setting aside what she called "reserve funds" dates back at least 20 years.

Meanwhile, Assistant U.S. Attorney Rua Kelly asked the state judge to delay her ruling on the taxpayers' request for 90 days so a federal grand jury can finish its investigation of the slush fund practice.

Kelly said the law provides that anyone who testifies in an inquiry ordered by Lobis would be virtually immune from federal prosecution. She added that thousands of documents have been reviewed and the federal investigation is proceeding.

The judge reserved decision on the petition request and said she would not do anything that had a negative impact on the federal grand jury's investigation.

Siegel's clients are seeking the judicial inquiry under a rarely used City Charter rule created in 1873 to fight corruption following the reign of Tammany Hall boss William Tweed.

It was last successfully invoked by a court in 2000, when the city's public advocate, Mark Green, forced an inquiry into Mayor Rudy Giuliani's release of the juvenile arrest record of an unarmed man who was fatally shot by police.