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Sunday, July 19, 2009

New York City Council Member Miguel Martinez Admits Stealing Public Money

Martinez (pictured above) is a Robbin' Hood is there ever was one. And, it looks like there are more members of City Council who will be proven as violating the public trust... Maria Del Carmen Arroyo (pictured below)looks like she might be next.

Other big losers in the last few days: The Daily News, whose Editors need to try to wipe the egg off of their faces now that their support for City Council members who railroaded a third term without a public referendum is seen as exactly what that was: payola, journalistic corruption, foolery. Read the comments to the article below!

Manhattan City Councilman Miguel Martinez admits he stole tens of thousands of taxpayer dollars
BY Thomas Zambito, Robert Gearty and Greg B. Smith, DAILY NEWS STAFF WRITERS
NY Daily News, July 17, 2009

City Councilman Miguel Martinez Thursday admitted he'd stolen thousands of taxpayer dollars through a series of scams that began in his first days in office.

Martinez pleaded guilty to conspiracy charges and revealed he'd pilfered $106,000 in Council funds through various schemes from October 2002 through spring 2008.

The Daily News first reported Martinez's self-dealing in April 2008 - triggering a city Department of Investigation probe, which led to the criminal charges.

He began stealing almost from the day he arrived at the Council in 2002 to represent Washington Heights and Inwood.

Martinez funneled money meant for children's art programs and low-income housing into bank accounts he controlled under cover names. He submitted bogus invoices to pocket money meant for office expenses.

And nobody was the wiser.

Standing before a Manhattan Federal Court judge, Martinez admitted to his crimes in a matter-of-fact manner, saying he "was able to engage in these schemes because I was a New York City councilman."

Released on $250,000 bond in a deal that offers him prison time of 57 to 71 months, he dodged waiting reporters when he fled the courthouse.

Half the money came from a controversial slush fund Council members use to pay for pet projects. That fund is the subject of an ongoing inquiry by the DOI and Acting Manhattan U.S. Attorney Lev Dassin.

Until Thursday, that probe had netted only two Council aides. Dassin said his office will continue "to scrutinize allocations of New York City taxpayer funds most vulnerable to abuse."

DOI Commissioner Rose Gill Hearn wouldn't criticize the Council but called Martinez's pattern of stealing from nonprofits he subsidized with public money a "textbook case."

"I never really like to tar everybody with a broad brush," she said. "[But] several years ago, our offices decided to focus on this area of money that goes out through the Council and where it's going and how it's being spent and what are the checks and balances on that money."

Hearn praised Council Speaker Christine Quinn's reforms to better monitor the money, but added, "Whether or not people will get around those and engage in additional fraud, I don't know. It's our job to be there if they do."

Quinn called Martinez's admissions "a shameful breach of public trust" but declined further comment.

In recent months, several politicians - both city and state - have been caught pocketing money from nonprofits they subsidized with public dollars. Some of the groups employ their relatives or legislative aides.

In Martinez's case, his sister, Maria, sat on the board of the Upper Manhattan Council Assisting Neighbors. In the past two years, Martinez sponsored nearly $800,000 for U-CAN.

After The News reported that conflict, DOI discovered that in 2004 and 2005, Martinez arranged for U-CAN to partner with an unnamed developer building low-income homes.

The developer got millions of dollars in tax credits. In return, Martinez had the developer pay U-CAN $96,000, of which $40,000 went into bank accounts the councilman controlled.

He did the same with the Washington Heights Arts Center, which received $163,000 in city funds since 2003, most sponsored by Martinez. In that time, the center wrote $15,000 in checks to Martinez-controlled bank accounts.

He also submitted invoices for bogus "expenses" for "media outreach" and "staff development." The vendor - a shell corporation - would write checks to his bank accounts.

Prosecutors did not identify the co-conspirator involved in U-CAN, Washington Heights and one of the shell corporations, Greater Manhattan Group.

Former U-CAN Director Tacito George was a board member of the arts group and the shell corporation. He could not be reached for comment.

The councilman even used fake names to conceal his corruption, controlling one account under the name Samajulis. His sister, Maria, controls a company with that name.

Stop the thieves: City Council must end pork-barrel member items
Friday, July 17th 2009, 4:00 AM

Two days after resigning as a Manhattan city councilman, Miguel Martinez pleaded guilty yesterday to having been a cheap crook from almost the day he took office in 2002.

He ripped off his expense account and he used his ability to tap into Council slush funds as a way to finagle kickbacks. All told, Martinez made off with more than $100,000.

Some people are just determined thieves. The question for the Council, most notably for Speaker Christine Quinn (pictured below): Why make it easy for them?

Martinez's pocket-lining is an example of how corruption-prone the Council's system of doling out so-called member items has become.

Each lawmaker gets money every year to give to favored groups under the loosest of controls. No surprise, many of these pork-barrel grants go to organizations with ties to friends or family of the members.

Two aides to Councilman Kendall Stewart have pleaded guilty to stealing grant money. Council members Larry Seabrook and Maria del Carmen Arroyo are under scrutiny. And now, Martinez.

Last spring, amid a phantom grant scandal, Quinn and colleagues David Yassky and Dan Garodnick proposed ending member items. The 48 other Council members killed the plan.

It's time for Quinn to try again. End all member items.

Poetic Justice Jul 17, 2009 4:17:03 AM Report Offensive Post
Funny how the DN editorial board want to "stop the thieves" but never considered this about going along when you used your editorial judgment to extend term limits. This same crook of a politician you mention he was going to run for a 3rd term and most likely would have won. This is the reason why the people voted for term limits twice but you and your board members had the gall to go along to allow these crooks and the Emperor of the city to have their way and open the floodgate again for corruption. Be careful of what you ask for your might get it goes the saying.

Batsen Jul 17, 2009 8:23:33 AM Report Offensive Post
"End all member items." RIGHT ON!!! .... When did it become accepted that public coffers were piggy banks for the whims of politicrooks???? No monies without at least a vote!

dreamrequest Jul 17, 2009 11:44:46 AM Report Offensive Post
Public coffers used for Noblesse Oblige? Thought we got rid of that back in 1776... Term Limits.... isn't that what a vote is for?

BobbyM Jul 17, 2009 12:04:33 PM Report Offensive Post
I"ve eaten swiss cheese with fewer holes than this editorial. If the City Council is such a den of thieves, how come you didn't point that out when they overturned the twice-expressed will of the people to permit Bloomberg to purchase a third term? How come you didn't call them out for that crooked, thieving, low-down dirty deal? Gentlemen: you need to make up your minds. Either you admit the City Council is crooked all the time, or you spend your editorial ink on something else for which you have a better grasp.

BelleHarborGuy Jul 17, 2009 5:13:58 PM Report Offensive Post
I think it is painfully obvious that this "slush fund" misappropriation comes right from the top of the city council and points directly to Christine Quinn. Where is her resignation? Where is her indictment?

Councilwoman Maria del Carmen Arroyo on radar in slush probe
by Greg B. Smith, Daily News Staff Writer, Friday, July 17th 2009, 4:00 AM

Hours after Councilman Miguel Martinez admitted being a thief, prosecutors and investigators emphasized their inquiry into City Council slush money was far from over.

Already on their radar screen is Bronx Councilwoman Maria del Carmen Arroyo.

Like Martinez, Arroyo funneled hundreds of thousands of taxpayer dollars from the slush fund into a nonprofit controlled by relatives.

The relative was her nephew, Richard Izquierdo, (pictured below) and the nonprofit was the South Bronx Community Corp. Last month Izquierdo was arrested for stealing money from an SBCC affiliate.

Richard Izquierdo Arroyo and Margarita Villegas: Accused of looting nonprofit for pols' trip.

The charges included using funds from the nonprofit to pay for flights to Puerto Rico and other warm locales for Arroyo and her mother - and Izquierdo's grandmother - Assemblywoman Carmen Arroyo.

Izquierdo also had the nonprofit supply a new floor for the assemblywoman's Bronx office, a criminal complaint said.

Before Martinez's plea, the DOI investigation netted two aides to Brooklyn Councilman Kendall Stewart. Both pleaded guilty last month to stealing $145,000 from a nonprofit Stewart subsidized from the Council slush fund.

Stewart has not been charged and has denied knowing anything about what his aides did with the money.

Lulu of a bill: Speaker Christine Quinn's pay scheme makes case for Council reform
NY Daily News, Friday, March 6th 2009, 4:00 AM

The City Council today will begin considering legislation that would bar some of its own abuses of power.

The timing is exquisite.

Just a short few days ago, Council Speaker Christine Quinn proved by her own conduct why reform rules are necessary.

Among other things, the bill would ban the speaker from doling out so-called lulus to favored members. These payments on top of salary - ranging from $4,000 to $18,000 a year - enable the speaker to reward loyalty. The credo is: Vote right, do well.

A new crop of loyalists last week felt Quinn's love in their assignments, if not their paychecks.

She gave six members new, more desirable committee posts, four entailing nice raises.

The money winners were Darlene Mealy of Brooklyn, (pictured at left) who went

from no lulu to $10,000; James Sanders of Queens, (pictured below) who went from nothing to $10,000; Jimmy Vacca of the Bronx, who jumped from $4,000 to $10,000; and Melissa Mark Viverito of Manhattan, who climbed from zero to $4,000.

Simcha Felder of Brooklyn and Miguel Martinez of Manhattan got to lead more prestigious committees while staying at the $10,000 level.

The six generally follow Quinn's lead in voting. And all but Viverito stood with her on the most controversial Council action in years - that being the vote to extend term limits.

Mealy, Vacca and Sanders were particularly valuable to Quinn in getting the measure through because they switched their votes from no to yes at critical junctures.

The speaker's ability to, in effect, purchase support undermines representative democracy by giving individual lawmakers the incentive to vote on behalf of their wallets rather than in the interests of constituents.

The way to end that conflict is to ban lulus, as good government groups have urged for years.

Nearly two years after Queens Councilman Tony Avella requested a bill, the Council staff has now drafted a measure that includes such a bar. It will be ready for introduction today, fulfilling a commitment Quinn made a long, long time ago.

The bill would bring the Council in line with the best practices of the United States Congress both in equalizing compensation for all members and in setting proper procedures for voting pay raises.

Avella refuses to accept his $8,000 lulu on principle. He will be looking for support among colleagues who are only too happy to supplement their $112,500 salaries. We wish him luck in finding co-sponsors.

Eric Gioia, also of Queens, is in Quinn's good graces. He gets a $10,000 stipend, but he donates it to charity. He tells us that he's for banning lulus. That's two. Passage needs 26. Who's next?

Manhattan DA candidates should compete to crack down on City Council scandal
NY Daily News, Sunday, July 19th 2009, 4:00 AM

New York's season of scandal heated up with the conviction of Miguel Martinez, who abruptly resigned from his upper Manhattan City Council seat and days later pleaded guilty to stealing $106,000 in public money.

The handsome 39-year-old pol will spend at least five years in federal prison pondering the sick folly of his crimes, which included pocketing funds earmarked for children's arts programs and housing for the poor.

Martinez joins two thieving Council staffers, one of them the chief of staff of Brooklyn councilman Kendall Stewart, who last year pleaded guilty to stealing $145,000 that was supposed to help schoolchildren.

The Stewart aides, Joycinth Anderson and Asquith Reid, each face up to 20 years when they are sentenced this fall.

We're nowhere near finished with the Council corruption probe, but it seems clear that the city Department of Investigation and the U.S. attorney's office could use some help in rooting out the crooks at City Hall.

Don't get me wrong: DOI Commissioner Rose Gill Hearn and acting U.S. attorney Lev Dassin are doing a great job of uncovering corruption at the Council. In June, they charged Richard Izquierdo Arroyo - the nephew of Bronx councilwoman Maria del Carmen Arroyo and grandson and chief of staff to Assemblywoman Carmen Arroyo - with embezzling $200,000 in public money.

But the probe has been going on for two years now, and we're long overdue for an update on the explosive allegation that triggered the current probe: The acknowledgment by City Council Speaker Christine Quinn that over $17 million in Council discretionary funds were allocated to non-existent organizations.

With fewer than 60 days to go before the all-important Democratic primary election, most voters will head to the polls without knowing for certain whether their favorite Council candidate should be making laws or making license plates.

Manhattan voters, who are due to select a successor to retiring District Attorney Robert Morgenthau, should insist that all three candidates for the office promise to create a special, permanent division of the Rackets bureau just to watch over the Council's disbursement of money.

The sad truth is that it's a full time job - one that not all of Gotham's district attorneys take seriously.

Consider the high-profile political corruption cases in the Bronx in recent years. Ex-Sen. Guy Velella and former assemblywoman Gloria Davis each went to jail in unrelated bribery cases.

In both instances, it was Morgenthau, the Manhattan prosecutor, who brought the charges, not Bronx D.A. Robert Johnson.

Morgenthau, in fact, has displayed a delightful penchant for jumping into public corruption cases that some believed fell outside his New York County jurisdiction. In 1986, at the start of the last major municipal scandal, Morgenthau publicly clashed with then-U.S. Attorney Rudy Giuliani over who should take the lead in chasing down accused chiselers in public office.

And decades before that, in 1968, Morgenthau - who was U.S. attorney at the time - got into a feud with local prosecutors over who should lead the corruption case against the city's water commissioner.

We need more of that fire. Prosecutors should be shouldering one another aside in a citywide competition to find, bust and prosecute every one of the crooks in the council.

Each of the three candidates for Manhattan D.A. - Leslie Crocker-Snyder, Richard Aborn and Cyrus Vance Jr. - should vow to watch the Council like a hawk. They might even propose legislation explicitly requiring Council members to report discretionary expenditures to the prosecutor's office.

It just might head off the next scandal - or, even better, convince petty crooks to ply their trade somewhere besides City Hall.

n the coming weeks I am going to be looking at some of the hottest races for City Council. Bill deBlasio’s seat is up for grabs in Brooklyn, and John Liu’s vacancy in Queens is provoking a fiery race. Helen Sears and Kendall Stewart are facing opposition as well. Keep posted here for more…much more.

But today let’s take another look at one of my least favorite City Council members. Miguel Martinez represents Upper Manhattan’s District 10…the part “East of Broadway” as locals like to characterize it.

Looking over Mr. Martinez’ own website it is difficult to figure out what he and his staff believe his greatest accomplishments to be. A recent press release lauds the Member for sponsoring, “in collaboration with the New York Hispanic Cosmetology and Beauty Chamber of Commerce…a Women's Fair on Health, Beauty and Self-Esteem.”

OK, the neighborhood has more than its share of beauty parlors, and giving them a city-funded chance to showcase their wares probably fulfills a basic obligation to the local business community. And the Fair apparently offered “FREE on-site HIV testing”—sounds great. So who’s complaining?

Fallout from the U-CAN scandal reveals that Washington Heights has directly suffered from the incompetent management of City funding. Recall that U-CAN (Upper Manhattan Council Assisting Neighbors) began receiving large earmarks after Mr. Martinez’ sister became a board member of the group.

Part of the City’s settlement with Con Edison after the notorious 1999 blackout was for the utility to set aside $1 million to build a community center in Washington Heights. U-CAN’T was ingeniously given control of the project, which went nowhere for a decade. Fortunately the money appears to just be sitting in a bank account, and hasn’t been spent on anything else. But, as the Post puts it, “now there's no community center, $1.2 million of a $5 million pot Con Ed allocated exclusively for use in Washington Heights is sitting in a bank account 10 years later, and a legislator and his pet group are under intense investigation.”

It is always instructive to look at politicians as viaducts…or maybe “sewers” is the right word. Money flows in and through them, so it is useful to see who is contributing, and to hazard a guess or two as to why.

Recently Miguel Martinez had a new contributor to his campaign…someone who has never donated money to a City politician in the past. Carlos Ruiz gave $500 to the Martinez campaign on April 30, 2009. Mr. Ruiz is the President of Inwood nightspot Ambaroom, a popular Dominican club on 10th Avenue.

Perhaps as a matter of coincidence, or maybe not, a class-action lawsuit was filed in Federal court in February alleging massive minimum-wage labor law violations by Mr. Ruiz at Ambaroom. Now some people might say that the minimum wage in Inwood is honored more in the breach than in the observance, but it looks like Carlos Ruiz is playing a little cover-your-ass to the tune of five bills.

More salient perhaps is the case of Jack Brown of Brooklyn, who generously gave the Martinez campaign $2750 in February 2009. Mr. Brown lists himself as a Vice-President of Geo.

What is Geo? Geo is a NYSE-listed international provider of correctional services to governments across North America, the UK, Australia and South Africa (!). It was formerly known as Wackenhut but presumably underwent rebranding after some bad publicity emerged about the company.

Geo continues to make news. A Geo-run youth prison in Texas recently lost its contract after state corrections officials were horrified by conditions there. In April Texas courts upheld a $42.5 million dollar award against Geo, affirming that the company was responsible for the murder of inmate Gregorio de la Rosa. Apparently a Geo guard stood by and laughed as de la Rosa was beaten to death…this was established by the 13th District Court of Appeals as a matter of fact.

Want more? Eight inmates died in the span of five months at a Geo-run Pennsylvania prison, the George W. Hill Correctional Facility in 2007-08. Geo has also gone into the growing and richly lucrative business of detaining undocumented aliens in a sprawling network of gulags. I could literally go on and on for pages about the abusive and vile practices of this prison-for-profits enterprise.

Jack Brown lists his business address as 988 Myrtle Avenue in Brooklyn, which is the home of Brooklyn Community Correctional Center, a minimum-security coed facility, probably not among the worst of Geo’s prisons. His donation to Miguel Martinez’ campaign makes perfect sense when we recall that Mr. Martinez chairs chaired the Fire and Criminal Justice Services Committee, which oversees corrections and probation matters for the City.

Warden Brown has donated money to City politicians in the past, but usually in the $200 range. According to CFB documents he used to work for the Correctional Services Corporation, another for-profit prison company which was fined $300,000 by the state of New York in 2003 for bribing state legislators.

So Miguel Martinez, outspoken champion of the rights of the heavily-immigrant 10th District, takes big money from an executive of a company that locks up illegal aliens, and which smiles on the dog-pit environment of the prisons that it runs for profit.

Nice work Miguel. Can somebody get this guy out of office?

Reader Comments (4)

Many folks here in District 10 distrust the Councilman, his CFB scandal last year really did some damage. UNfortunately there seems to be few candidates in the November race who can challenge his name recognition or match his funds. There is hope in one challenger who's run against him several times now, but in my opinion chances are slim.
June 17, 2009 | Unregistered CommenterF.

MM is no longer the Chair of the Fire & Criminal Justice Services Committee.
June 17, 2009 | Unregistered CommenterCRK

True, he is no longer Chair of the Committee. However he was Chair when he accepted the contribution from Mr. Brown.
June 17, 2009 | Unregistered CommenterSeth

Well, that is not really true about Miguel Martinez, not having a viable contender to challange him. Perhaps the Luis Facundo is new to some readers, but not new to hundreds of small business men and residential tenants who Luis has so valiantly stood up for for over 10 years in district 10. Luis walks in some parts of Washington Heights, Inwood and Marble Hill and is treated as a celebrity, which is evident from the number of pats on the back and hugs he recieved from local residents and businessess he walks into. Some many people just love this guy. Maybe just real smart people.

On the short and long of it, Luis is a noted architect having worked with HPD as a senior designer and would've known exactly where and how to use those funds. Perhaps Miguels inabilty to find some proper professional consultation on this matter or possibly use it to turn the old beaten down marina at the end of Dykman Ave into a viable community center. Well just my opinon. Well trust me his distrust is well noted in District 10, i don't see him much in the community either? Humm!
June 29, 2009 | Unregistered CommenterBMS

May 24, 2009 --

MORE than $1 million set aside by Con Ed to improve Washington Heights after the 1999 blackout is sitting unused a decade later because the group the city selected to build a community center never produced a viable proposal.

The group -- Upper Manhattan Council Assisting Neighbors (U-CAN) -- isn't likely to produce anything soon but legal papers.

Last month, authorities investigating how legislators steered government funds to favored nonprofits as part of the City Council "slush funds" scandal raided U-CAN and seized boxloads of records. The city immediately shut off its funding.

Councilman Miguel Martinez (D-Man.), U-CAN's chief sponsor, said the organization is "barely" operating, and that he intends to move the Con Ed funds, plus another $2 million put up by the city for the community center, to another local sponsor.

"According to my understanding, the money is still in the budget," Martinez said, a remarkably upbeat assessment considering the situation.

City officials said talks with U-CAN on the community center stretched on for years and ended in September 2008, five months after it was disclosed that Martinez allocated hundreds of thousands of dollars to the group once his sister joined its board in 2005.

The Post has also learned that a second board member, Cindy Espinoza, used to work for Martinez at the council.

"They were never able to present us with a viable project that met the city approval process," said one city official.

Martinez countered that the group was busy "looking for sponsorship" for operating expenses, and he blamed the city for contributing to the delays.

"It takes awhile in terms of getting details from the city -- square footage, how the city money is going to be used," he claimed.

One source said the administration was willing to work all those years with Martinez because it "wanted to maintain a positive relationship with him. He was very supportive of the Washington Heights rezoning."

But now there's no community center, $1.2 million of a $5 million pot Con Ed allocated exclusively for use in Washington Heights is sitting in a bank account 10 years later, and a legislator and his pet group are under intense investigation.

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