When investigators examined the operations of a sprawling New York social service organization, what they uncovered was deeply troubling. Board members of the Ridgewood Bushwick Senior Citizens Council had almost no experience in nonprofit management. Several couldn’t name any of the group’s programs. Two of them could not identify the executive director, who in turn told investigators she was unaware of a fraudulent scheme carried out under her watch: Employees had squandered or stolen most of an $80,000 city grant.
As a result of that July 2010 report by New York City’s Department of Investigation, both the city and state quickly pulled the plug, suspending the organization’s grants, which provide practically all of its funding. But just as quick, the Brooklyn-based group won back it’s government support on the condition that it enact corrective measures, and today, the council has active grants from the city and the state totaling more than $50 million. Maybe that’s because the organization provides critical services, such as senior care and affordable housing, as a city spokeswoman said when funding was restored. But the council may also be thriving because its founder, Vito Lopez, was for years one of New York’s most powerful politicians — a state legislator who spent much of his career channeling that power through Ridgewood Bushwick.
Lopez personally directed at least $505,000 in state grants to the organization from 2007 through 2010, the only years for which data are available, and has reportedly had a hand in millions more. He helped elevate the group’s employees to political office. Other candidates, elected with Lopez’s help, have directed even more public money to Ridgewood Bushwick in return. The council’s former executive director, forced out in disgrace, was Lopez’s campaign treasurer; she later pleaded guilty to lying about a raise that hiked her salary to $782,000 for the fiscal year ending in June 2010. And Ridgewood Bushwick’s housing director is Lopez’s girlfriend.
This may look bad. It’s not unusual. Vito Lopez is but one example of a surprisingly common phenomenon afflicting state legislatures. Since 2010, at least eight New York lawmakers or their related charities have been investigated, charged or convicted of pillaging public funds. Earlier this year, former state Sen. Shirley Huntley pleaded guilty in two separate cases, one in which she sent state grants to a nonprofit she had founded before pocketing the money, the other in which she helped her niece and a former aide steal funds she directed to another group that, yes, Huntley herself created.
New York’s legislators outshine their peers in this department, but they’re not alone. Two former Florida state senators repeatedly directed state funds to a struggling group on whose board they sat, apparently not a violation of state law. A Pennsylvania charity had its state funding frozen after a state audit found it allegedly gave no-show jobs worth hundreds of thousands of dollars to a pastor and his aide at the direction of a state lawmaker. Illinois, Ohio and South Carolina all have seen similarly close ties between certain legislators and charities they helped fund.
While several examples led to criminal charges of theft and fraud, others appear to be perfectly legal: public officials are simply tipping the scales in favor of groups they are associated with or have a family member working for.
“The issue to me is what’s legal, and the fact that there’s a tremendous amount that’s legal,” said John Kaehny, executive director of Reinvent Albany, a group advocating government transparency. Kaehny said public officials in New York have used charities to conduct “widespread looting” of taxpayer funds with little repercussion.
As for Lopez, he’s gotten into plenty of trouble in recent weeks — but not for anything related to Ridgewood Bushwick, despite reports of federal investigations back in 2010. Instead, in May, the New York Assembly forced Lopez to resign after the state’s ethics commission released a report exposing lurid details of several sexual harassment complaints against him. On June 11, the Legislative Ethics Commission said that Lopez's conduct had violated state law and fined him $330,000.
Lopez and his attorney did not return calls seeking comment. James Cameron, who became CEO of Ridgewood Bushwick in 2011 after the city ordered the group to overhaul its leadership, said the organization is fully independent of Lopez. Any ties exist simply because it operates in the neighborhoods he has represented for decades.
“He does not control, influence or dictate anything that happens in the organization,” Cameron said. “But it’s a large organization. If he’s talking to staff out there in the field I would have no way of knowing.” The former executive director, interviewed by city investigators three years ago, likewise distanced herself from her subordinates’ actions, saying she had no “crystal ball” to know if employees were dishonest. Ridgewood Bushwick and affiliates employ 2,100 people.
Lopez is now running for a seat on the New York City Council and has received campaign contributions from at least 10 employees of the organization.
Rick Cohen, who has written extensively on the links between politicians and charities for Nonprofit Quarterly, said that in state capitols across the country, lawmakers direct taxpayer money to their pet groups irrespective of whether they need or deserve scarce public dollars. “I’ve seen very little evidence in … states that do this,” he said, “that there’s an accountability regimen or the oversight that’s needed.”