Prometheus 6

Ms. Quinn said that the practice of appropriating money to fictitious groups grew out of a bookkeeping maneuver dating to at least 1988 in which the Council, during the budget process, established holding accounts to keep money in reserve for community programs or other needs that came up in the middle of a given year.

Ms. Quinn, who became speaker in January 2006, said she found out about this practice, absent the use of ghost organizations, in the spring of 2007 during her second budget process and immediately ordered it stopped....

Despite the investigations, Ms. Quinn said she believed that the money allocated to phantom groups was ultimately spent on legitimate programs.

Phony Allocations by City Council Reported
By RAY RIVERA and RUSS BUETTNER

The New York City Council has appropriated millions in taxpayer dollars in recent years to organizations that did not exist, Council Speaker Christine C. Quinn disclosed on Thursday.

The maneuver, in which funds were set aside for fictitious groups like the Coalition of Informed Individuals and Senior Citizens for Equality, allowed Council members to spend the money later on community programs they supported without obtaining the mayor’s approval.

The practice dates to at least 2001 and encompasses the tenures of the previous two speakers, Peter F. Vallone Sr., and Gifford Miller, according to Ms. Quinn.

Since 2001, about $17.4 million has been budgeted for dozens of fake community groups, according to documents provided by Ms. Quinn’s office.

“I was obviously deeply troubled when I found out about this information,” Ms. Quinn said at a news conference on Thursday, after The New York Post reported on the practice. “I had no knowledge of it; I did not know this was the practice. It’s something I believe is completely inappropriate and should not have gone on, and will no longer go on.”

Ms. Quinn said she alerted investigators from the United States attorney’s office and the city’s Department of Investigation about the practice last fall.

Ms. Quinn said that the investigators were already involved in a broader inquiry when she contacted them. Sources familiar with the investigation say it involves Brooklyn nonprofit organizations that Council members have financed.

At least one Council member, Kendall Stewart, has been subpoenaed in that probe, though he has told news organizations that he is not a target.

Despite the investigations, Ms. Quinn said she believed that the money allocated to phantom groups was ultimately spent on legitimate programs.

Ms. Quinn said that the practice of appropriating money to fictitious groups grew out of a bookkeeping maneuver dating to at least 1988 in which the Council, during the budget process, established holding accounts to keep money in reserve for community programs or other needs that came up in the middle of a given year.

Ms. Quinn, who became speaker in January 2006, said she found out about this practice, absent the use of ghost organizations, in the spring of 2007 during her second budget process and immediately ordered it stopped.

Then last fall, she said, she found that her finance staff was continuing the practice and learned for the first time the staff was using the names of fictitious organizations to set aside the money.