Prometheus 6

Some former officials said putting aside money was meant to help correct mistakes, like forgetting to finance an important program, without having to formally seek approval for additional spending from the mayor. Council leaders once tried to create a general reserve fund for such contingencies, but the concept never took hold, so council officials set out to devise their own response to the problem....

“It’s a device that he has in his political arsenal,” said Eric Lane, a law professor at Hofstra University who was counsel to the charter revision commission. “In many ways the mayor can say, ‘You guys got yours, now just go along with the budget.’ ”

Longtime Practice of City Council Financing Lands on Speaker’s Shoulders
By DIANE CARDWELL

In the widening scandal that has revealed the peculiar accounting methods of the New York City Council, a harsh light has been cast on Christine C. Quinn, the Council speaker, who is being asked to answer for a system not of her own making.

Defined by phrases like “phantom organizations” and “slush funds,” the tale of how the Council stashed taxpayer dollars for later use in the names of fictitious groups has surprised watchdog organizations and private citizens. Criminal investigators are now poring over the spending habits of some council members to see if they funneled city money to groups with questionable programs or to whom they had close ties.

It is quickly becoming a campaign issue for officials staring at election battles, including Ms. Quinn, the first female speaker of the Council, who once seemed a promising hopeful for mayor.

But veterans of New York City politics say that many of the practices now being revealed are far from novel or rare. Indeed, they say, they are woven into the very fabric of city government, tough threads spun from the mayor’s near lock on power, which leaves lawmakers with few ways to wield influence, affect life in their communities or make a name for themselves.

The idea of creating fake budget lines for Council discretionary funds appears to have been born after the charter revision of 1989, which abolished the Board of Estimate and gave sole approval over the mayor’s budget to the Council.

The change, in a mayor-centric system, did not give the Council a lot of new power. But it gave members the ability to dole out the discretionary funds that the mayor, seeking to smooth the passage of his spending plan, granted them.

Those funds represent just a tiny portion of the budget — less than six-tenths of a percent in the fiscal year ending in June. But they are critically important to the members as a way to curry favor with supporters and constituents.

“It’s not just the top priority,” said David Yassky , a Brooklyn councilman who is running for comptroller, “but Priorities 1, 2, 3, 4 and 5.”

Since these discretionary funds are relatively small and act as a kind of governmental lubricant, or what Mr. Yassky described as hush money, it is not surprising, analysts say, that the mayor’s side of City Hall never worried much about how council members spent them.

“You’re buying their good will,” said former Mayor Edward I. Koch. “It makes them more amenable to accepting your budget. Budgets, you know, require the other party to accept yours. The mayor is in charge of billions and they’re talking about millions.”

“The difference is incredible,” he added, chuckling.