Everyone agrees: New York needs jobs.
But when it comes to the specific projects that politicians and developers promise will create them, the issue often becomes more complicated and controversial, particularly for those who live in a neighborhood that will be changed as a result.
In recent months, the city has approved two such projects: a giant IKEA furniture store in Red Hook, Brooklyn and a water filtration plant in Van Cortlandt Park in the Bronx. And in coming months, the fate of another huge project - the development of the West Side of Manhattan that includes a new football stadium for the New York Jets - will also be decided.
Supporters of each of these projects promise that they will bring much-needed jobs to the city. But opponents question such promises and point to the cost to taxpayers, the increase in traffic, and scourge of pollution that come along with new them.
The details and plans of such projects lie largely with the mayor and the city's Department of City Planning, which is responsible for the city's physical planning and review process.
But it is the local City Council member - who is elected by just a few thousand people - has the most to gain or lose politically. Individual council members often use their power over land use decisions and zoning as well as their "bully pulpit" to help shape economic development proposals.
Here are three new economic development projects that will reshape the city and a look at what City Council members on both sides have to say about each.
YES: Why Brooklyn Needs IKEA - Sarah Gonzalez
Councilmember Sarah Gonzalez, who represents the neighborhood where the new IKEA will be built, argues that "there hasn't been an investment of this size in Red Hook since World War II."
NO: Companies Must Share Our Values - Charles Barron
East New York Councilmember Charles Barron argues that companies can do more to help local residents. "We don't talk about the fact that IKEA is a Swedish company from a country where 90 percent of the workers are unionized," he says, and "none of the IKEA workers in America are unionized."
YES: A Legacy Investment - Madeline Provenzano
YES: Job Creation for Future Generations - Joel Rivera
Bronx council members Madeline Provenzano and Joel Rivera say that Van Cortlandt Park is the best place to build a new water filtration plant for the city. "We need to provide a job creation program to ensure that future generations will be able to put food on their plate, clothing on their back, and be able to pay the rent," says Rivera.
NO: Wrong Place, Wrong Time - Oliver Koppell
NO: Jobs Don't Trickle Down - Helen Foster
Bronx council members Oliver Koppell and Helen Foster say the filtration plant should be built elsewhere. "The promise of jobs is a red herring," says Koppell. "This is a project being built in the wrong place at the wrong time."
YES: Time To Develop the West Side - David Weprin
Councilmember David Weprin, who chairs the council's finance committee, argues that the plan to develop the West Side, expand the Javits Convention Center, and build a new stadium for the New York Jets is "an opportunity to leverage private investment to create jobs and economic growth."
NO: Stop the Stadium - Christine Quinn
West Side council member Christine Quinn argues that the Jets stadium will be "the most expensive stadium ever built" and that 21,000 people who live in the area are not being given a chance to say in the future of their neighborhood.
•Related, by Fred Siegel and Harry Siegel:
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As befits a conservative crowd, the Republican Party has not rushed into New York City. The party was founded on July 6, 1854. It will open its first national nominating convention in New York City on August 30, 2004 — just over a century and a half later.
The GOP says that it is finally coming to New York because we offered "the best package of goods and services." Almost certainly the proximity of the convention's dates to the third anniversary of the simultaneous terrorist attacks on the Pentagon and World Trade Center, and the courageously aborted attack on Washington D.C., on September 11, 2001 has something to do with it.
The Republican Party does have a long history in New York. But what has the state done for the national GOP lately? Not much. To find the most recent Republican presidential victory in New York State you have to go back 20 years, to the Reagan-Mondale race of 1984. For a victory in the city, you have to go back even farther – to the 1924 election when city voters supported Calvin Coolidge
The pattern is the same for Congress: declining Republican strength in New York. At the turn of the 20th century, both United States senators from New York were Republicans; at the turn of the 21st century, both were Democrats. In 1904, 20 of 37 New York members of the House of Representatives were Republican; in 2004, 19 of 29 New York Congress members were Democrats. Of the 13 members of the U.S. House of Representatives from the city, only one - Vito Fossella of Staten Island – is a Republican.
Governor George Pataki is a Republican. So are New York City Mayor Michael Bloomberg and a majority of the New York State Senate. But the governor gained office in 1994 not as a result of Republican strength, but as the beneficiary of an enormous electoral backlash against the three-term incumbent Democrat, Mario Cuomo. Pataki has held on for two additional terms through full use of the powers of incumbency, something that almost all modern New York governors have been able to use to their advantage. The State Senate remains Republican in the face of a rising Democratic tide through artful gerrymandering. The Assembly is solidly Democratic.
The mayor is a Republican by convenience; the GOP was simply a vehicle for his seeking and gaining office. Bloomberg's unsuccessful effort to make nominations for citywide office nonpartisan (see related article, "The Short-Lived GOP Revival" by Fred Siegel and Harry Siegel) was just one of many clear indications of his discomfort with the party label and his desire to free himself of its constraints.
The old metaphor used to describe the geography of New York politics was "the upstate-downstate split." Democrats dominated in New York City; Republicans ruled (with a few exceptions) to the east, north and west. But today many rural and suburban districts in the state elect Democrats to represent them in Congress. Suburban counties like Nassau, Suffolk and Westchester have Democratic county executives. Democrats have been gaining enrollment pluralities or virtual parity in many upstate counties. Statewide, the last year in which New York Republican's voter enrollment exceeded that for the state's Democrats was 1956. In March of this year, there were over 2 million more enrolled Democrats than Republicans in New York State.
And New York is not just a Democratic state, but a liberal Democratic state. In a recent Quinnipiac University poll, New York voters were more supportive of affirmative action, more strongly against the death penalty and more pro-choice than voters surveyed in a national sample.
Ever since the mid-1960s, the national parties have become increasing divided along ideological lines, with Republicans more conservative and Democrats more liberal. At the same time, the center of political gravity in the nation has moved, with the population, to the south and west.
This has put New York Republicans at a disadvantage. The state's Republican leaders rose to national prominence when the kinds of moderate, pragmatic politics and policies that succeeded for them in New York were those that Republicans thought were necessary to win nationally. But the ideological polarization of the major parties made these appeals less attractive to the more conservative national GOP, while at the same time making the GOP less attractive to New Yorkers.
The failed national career of Nelson Rockefeller tracks the decline of New York Republicanism as a national force. In 1960, the newly elected New York governor threatened to take the presidential nomination by storm. Vice President Richard Nixon met with Rockefeller at the governor's Fifth Avenue apartment. The two negotiated the famous "compact of Fifth Avenue". In return for Rockefeller removing himself from contention, Nixon agreed to various things Rockefeller wanted in the Republican platform, including, a stronger position in favor of civil rights. Conservatives responded with outrage.
In 1964, Rockefeller was the center of a jeering confrontation at the national convention as he condemned "extremists [who] feed on fear, hate and terror, [and have] no program for America and the Republican Party." The party that year turned decisively rightward and nominated Barry Goldwater for president. In 1976 Gerald Ford, under conservative pressure, removed Rockefeller (appointed, not elected, to the post) from his ticket. No New York Republican has been a serious contender for the national ticket since.
At the same time, the painful truth is that slow-growing New York has become increasingly less important in national electoral politics. When Dwight Eisenhower was nominated in 1952, the state had 45 electoral votes; this year it will cast just 31. Republican presidential aspirants may need the campaign money they raise here, but they have shown that they can win the presidency without New York's electoral votes. And the kind of appeals that could win a national Republican candidate the votes of a majority of skeptical New Yorkers might very well lose them GOP votes elsewhere in the country.
In short, over the last 30 years, national Republicans have learned to win without New York. If they forgot that lesson - and focused on winning the state - the positions might well cost them the votes of the increasingly conservative party faithful elsewhere in the country.
Gerald Benjamin, a political scientist, is dean of the College of Liberal Arts and Sciences at SUNY New Paltz and a former Republican elected official.
•Related, by Gerald Benjamin:
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For a brief moment in 1997, it looked as though Gotham's Republicans were poised to become a long-term force in local politics. Rudolph Giuliani had just easily won reelection, becoming the first two-term Republican mayor in over 50 years. Giuliani joined with Governor George Pataki and Senator Al D'Amato to give Republicans three of the traditionally Democratic state's four most powerful offices — something that would have been unimaginable even five years earlier.
The brief Republican efflorescence was not so much a product of the party's dynamism as of voter dissatisfaction with Mayor David Dinkins and Governor Mario Cuomo. In what were referendums on the incumbents, the voters did not so much affirm the policies presented by Giuliani and Pataki as veto the long-time liberal approach associated with Dinkins and Cuomo. Despite that, Republicans were presented with a once-in-a-lifetime opportunity to leverage their newfound offices into an ongoing, vital GOP presence in the city. Instead the revival quickly floundered, wounded by well-organized Democratic and union opposition on one hand and Republican mistakes on the other.
"Wall Street Journal" columnist John Fund has argued that New York in effect has a three-party system made up of radical Democrats, Republicans and those Democrats who supported first Ed Koch and then Rudolph Giuliani. Victory at the polls requires a successful appeal to two of the three groups.
In 1993, with the city on the verge of bankruptcy and in the aftermath of the racially divisive Crown Heights riots, Giuliani, appealing to Republicans and Koch Democrats, was very narrowly brought in to right the ship. Despite record levels of crime and near record job losses, Giuliani defeated the hapless Dinkins by a mere 50,000 votes.
Giuliani's early austerity budget steered the city away from the shoals of fiscal collapse. But when the Wall Street boom put wind back in the city's economic sails, the public considered the crisis passed. It was safe to return to business as usual.
And so when Giuliani departed, the voters elected Michael Bloomberg. A lifelong Democrat turned Republican in order to bypass a hotly contested Democratic primary, the mayor is of more use to the national party — New York has the convention and a mayor careful not to bad-mouth Washington — than to local Elephants.
And Bloomberg is part of a long tradition: Of the Republican mayors in the last 100 years, only Giuliani was anything of a party loyalist — and then just for the second half of his second term. Fiorello La Guardia, whose closest ally was Democratic President Franklin Roosevelt, detested Republican Party politics, and John Lindsay left the Republican Party after losing its primary in his bid for reelection. He joined first the Liberal and Independent parties, and later the Democrats.
When Giuliani emerged as a political force in the 1980s thanks to his success as a U.S. attorney, Gotham's GOP was on life support after Lindsay's reign. In 1977, in the wake of the 1975 fiscal crisis, Republican mayoral candidate Roy Goodman collected a risible 4.5 percent of the vote. By the early 1980s, Democrats held Gracie Mansion, every seat on the City Council and every borough presidency. Giuliani's 1989 run for mayor nursed the local GOP back to a semblance of life.
With crime soaring and the economy sinking, the tough prosecutor's crime-busting message resonated. Although Dinkins won, Giuliani's unexpectedly strong showing helped spur new GOP candidates to run for City Council in 1991 — the year New York lost an astounding 191,000 jobs and suffered more than 2,000 murders. Though Republicans had won only a single race for a municipal office since 1983, these challengers wrested four council seats away from the Democrats. When Giuliani upset Dinkins two years later and then slashed crime and reined in the city's runaway budget with amazing speed, the Republican future began to look rosier.
"Back then," recalls former City Council minority leader Alfred Cerullo, "people looked to us as the only way to change things in the city. As things got worse, our prospects got better."
In a city in crisis, there was benefit in being the party of protest. Republican optimists thought the trend likely to continue. Giuliani won a second term in 1997 by a huge (by New York standards) 13 percentage-point margin that seemed to undermine the notion that New York is an unfailingly left-wing town. He got 43 percent of the Hispanic tally, 65 percent of the vote in Queens and 53 percent of the vote in Brooklyn, with only a single Republican officeholder.
But this proved to be the high-water mark of the party's very brief resurgence. Part of the problem was that Giuliani showed no interest in creating a party faithful to leave behind him. Virtually from the beginning of his tenure, he had been a freelancer, unconcerned with building his party or grooming a successor. His chief political mentor had always been Liberal Party boss Raymond Harding. Giuliani's gigantic political gamble of endorsing incumbent Democratic Governor Cuomo over George Pataki in 1994 further fractured Gotham's already weak GOP.
The mayor also clashed with members of his administration who might have emerged as viable successors and Republican leaders — most notably former police commissioner William Bratton, a Democrat once thought likely to switch to the GOP. Giuliani did little to cultivate for higher elected office the Republican City Council members, such as Andrew Eristoff, whom he had drawn into his administration, or prominent black and Hispanic officials who might broaden the party's appeal — people like former housing commissioner Richard Roberts, Health and Hospitals chair Luis Marcos, or Deputy Mayor Rudy Washington.
"You would think that people who worked for the Giuliani administration would have rushed to run for office [in 2001]," says political consultant Joseph Mercurio. But except for City University Board Chair Herman Badillo, who ran unsuccessfully against Bloomberg in the Republican primary, none did.
In six of 16 City Council races, the Brooklyn Republican organization did not bother to so much as field a candidate. In many neighborhoods where Giuliani won decisively in 1997, the Republican county organizations did not bother to run candidates for State Assembly the following year. In 2001, Bloomberg swept to easy victory in places — from Forest Hills to Borough Park — that fielded no Republican City Council candidates.
And so when Giuliani departed, the city's long-dominant interest groups, such as public sector unions and the nonprofit social service industry, reasserted themselves. They were largely unchecked by Giuliani's nominally Republican successor, Michael Bloomberg.
Despite his Republican label and business background, Bloomberg represents a return to politics as usual. In distancing himself from Giuliani's contentious style in dealing with the city's interest groups he cut himself off from the substance of his predecessor's success. Giuliani's accomplishments came from governing as the representative of a public that stood beyond the interests of any pressure group. Bloomberg, in savoring good relations with every group, left little room for the larger interests of the city as a whole until he belatedly took on the teachers union.
A Republican-of-convenience, Bloomberg nonetheless ran as Republican, promising fiscal austerity and, in essence, a kinder, gentler continuation of the prosperity and safe streets of the Giuliani years. But upon taking office, the mayor's agenda proved to be at odds with his campaign rhetoric. He promised no layoffs and raised taxes, quickly alienating the moderate outer borough Democrats who were key to electing him. Nor has Bloomberg expressed any interest in supporting other Republican candidates.
Ironically, the one thing he attempted that would have helped the local GOP was calling for nonpartisan elections. This was hardly a radical proposal: Nonpartisan elections are held in 8 of the 10 – and 41 of the 50 — largest American cities. Nonpartisan elections allow all voters, not just Democrats, to participate in the first (primary) round of voting and then pit the two candidates with the highest vote total, regardless of party, against each other in the general election. Currently in New York City, the absence of Republicans usually renders the November election a formality, with most offices won in the September Democratic primary, when turnout is tiny.
Nonpartisan elections would have strengthened the role of independents, moderates and swing voters as well as Republicans. Not surprisingly, Democratic Party regulars and the public-sector unions fought ferociously against the proposal because, in effect, it would have weakened them and helped the coalition of Koch Democrats and Republicans that made Giuliani's first-term reforms possible. While a few energetic young Republicans supported nonpartisan elections as a way to give life to the GOP by expanding the city's tiny electorate, many Republicans, thinking nationally, saw nonpartisanship as a threat to their interests and opposed the measure.
To win the referendum, Bloomberg had to convince a majority of the voters who bothered to go to the polls that non-partisan voting would have made elections more competitive and thus politicians more accountable. This is hard to get across quickly. But Bloomberg insisted on rushing the matter and got it placed it on the ballot only a few months after it had been officially proposed. Worse yet, he put it before the voters in the 2003 off-year elections, when turnout was very small and dominated by hard-core Democrats.
The results were predictable. Despite a Quinnipiac poll that showed a narrow majority of registered voters in support of non-partisan elections, the 12 percent of the electorate that showed up on November 4, 2003 defeated the proposition 70 to 30. The Republican reform era of the 1990s was officially at an end.
The other big winner in the referendum was the Working Families Party http://www.workingfamiliesparty.org/, which in effect represents the left wing of the Democratic Party, whose office holders almost all win in elections determined in low-turnout primaries. It emerged a major player in local elections by leading the unions get out the vote effort to defeat non-partisan elections and became the first third party in 30 years to gain a council seat in its own name.
The big loser was local Republicanism, which could have used nonpartisanship to create alliances with moderate Democrats and independents. Instead, the right in general and Republicans in particular are mostly cut off from the political and legislative life of the city, leaving a political competition between the moderate left and the far left that ensures the city's political center of balance will tilt still farther leftward.
And so it is that a decade of Republican mayors and a third term Republican governor in Albany add up to a Grand Old Party without a future in New York City. In fact, the mayoralty aside, it is becoming Gotham's third most powerful party, behind the Democrats and the increasingly muscular Working Families Party.
The Republican retreat is more than a loss for the GOP. It is a loss for a city and a near guarantee that we will revisit the tortured politics that allowed the Republicans to gain power I the 1990s. Having blown their chance to be the party of change, the Republicans again seem content to remain on the margins, as the party of protest.
Fred Siegel's book on New York in the 1990s will be published next year. Harry Siegel, the editor of NewPartisan.com, is writing a book on gentrification in New York City for Ivan R. Dee, publisher.
New York City Council Stated Meeting Report
Every two weeks the New York City Council meets for its Stated Meeting to introduce and pass legislation. As a regular feature, Searchlight covers these meetings and posts a summary of the bills passed.
STATED MEETING - June 7, 2004
Meeting Summary:
In the months after the collapse of the Twin Towers, the New York City Department of Buildings created a task force to look into how the city's buildings can be made safer. The panel, called the World Trade Center Building Code Task Force, looked at issues like building design, construction, and evacuation procedures for the city's 5,300 high-rise buildings. In February 2003, the group made 21 recommendations for improving safety.
On June 7, 2004, New York City Council passed new building code legislation based on 13 of the 21 recommendations. The council's bill (Intro 126-A) will require that:
- Building owners install emergency exit markings and signs at exit doors and stairs.
- Sprinklers be installed in all new hi-rise buildings.
- Existing skyscrapers upgrade their sprinkler systems.
- Fireproofing be re-inspected after building renovations.
- Building owners create emergency evacuation plans for non-fire related events like electrical blackouts, hazardous material spills, and other natural disasters.
"This legislation will go a long way to ensuring the security of generations to come," said Councilmember Madeline Provenzano, chair of the buildings committee.
The council also passed a bill (Intro 110-A) increasing fines for idling cars and buses and requiring more signs in bus terminals warning against leaving an engine running.
In 1971, the city passed an anti-idling law that restricts vehicles to idling for no more than three minutes. Last summer, a council investigation found that over 30 percent of buses in the city idle longer than allowed and that some bus companies build fines into the cost of doing business. Some neighborhoods with bus depots also have unusually high asthma rates, and some health and environmental groups believe there is a correlation. The legislation aims to reduce pollution in the city and particular in those areas.
"We have a number of hotspots where idling is a major problem... and [it] is detrimental to New Yorker's health," said Councilmember Eva Moskowitz, who authored the bill.
The council had a light legislative agenda for the day because it is currently focusing on budget negotiations with the mayor. A new budget for the next fiscal year must be approved by July 1.
Some Democratic council members took time in the meeting to urge the mayor to give new contracts for healthcare and daycare workers and called for increases in funding for social programs, senior citizen centers, and firehouses.
Republican Councilmember James Oddo read a passage from a speech by President Ronald Reagan, who died two days earlier, to say that those who advocate smaller government also share the goal of a better city. In the speech, Regan described America as "a tall, proud city built on rocks stronger than oceans, windswept, God-blessed, and teeming with people of all kinds living in harmony and peace; a city with free ports that hummed with commerce and creativity. And if there had to be city walls, the walls had doors and the doors were open to anyone with the will and the heart to get here."
"I ask that my colleagues keep [this image] in mind as we make some very difficult decisions in how to keep this city vibrant in the years to come," said Oddo.
The next Stated Meeting is scheduled for June 28, 2004.
For an archive of past meetings and council votes, visit Gotham Gazette's Searchlight.
As Summer approaches -- reminding us of last August’s blackout -- increased threats of terrorist attacks and the need for high-security around the Republican National Convention make it vital to assess what city officials are doing to insure that the city’s emergency communications systems are fully operational. These include the 911 and E-911 (for mobile phones) systems, radio spectrum for public safety communications, and a high-speed wireless back-up network.
Mayor Michael Bloomberg has ordered an overhaul of the city’s 911 system after the failure in late March that caused the emergency system to shut down for two hours due to a Verizon employee error. The overhaul would make the system faster, more reliable and more efficient. Under the plan, the city’s eight dispatch centers will be consolidated into two.
"The world continues to get more complicated, but responding to emergencies quickly and with the right resources still makes the difference when lives are at risk," Bloomberg reportedlysaid through a spokesman. "So whatever we can do to integrate and streamline our dispatch systems will only protect the people of New York."
New Yorkers have paid $281 million in taxes on their telephone bills to improve 911 since 1992 but the system -- which handles about 12 million calls a year -- still lags behind. Last year, the 311 system was introduced to handle non-emergency calls in order to alleviate the burden on the 911 system.
Similarly, cell phone customers are paying $1.20 a month for “enhanced 911,” a service that enables the location of callers to be traced, according to NY1 . However, only 12 cents per bill is going to the E-911 project while the rest is being used for the state’s general emergency fund. The upgrade was prompted by the deaths of four teenagers who drowned when their boat sank after a failed 911 call.
Increased cell phone use is interfering with public safety communications according to a City Council hearing on radio spectrum held in March. This is because public safety uses overcrowded radio systems, share channels with other agencies and share the same bandwidth with private cellular providers.
“During crisis,” said Councilmember Gale Brewer, “our first responders need reliable communication systems. Spectrum is important because it is the â€highway’ through which first responders communicate with each other. A shortage of spectrum jeopardizes the lives and health of our courageous public safety officials and threatens their ability to protect the lives of New Yorkers.”
Currently, there are two plans for dealing with this overcrowding and the danger that it presents for emergency communications. One option, proposed by the Association of Public-Safety Communications Officials-International and dubbed the “Consensus Plan,” would try to untangle public and private users of spectrum. Nextel Communications has committed $850 million for this initiative. Another option, the “Balanced Approach” as proposed by Verizon, would maintain current spectrum allocations and resolve problems on a case-by-case basis.
Currently, the Department of Information Technology and Telecommunications (DoITT) is supporting the first proposal. The issue is unlikely to be resolved before January 2007, which is the deadline for the transfer of spectrum as part of pending federal legislation called the HERO Act.
In the meantime, the office is exploring other ways to improve the city’s emergency communications including using high-speed wireless technology to expand the capabilities of public safety workers. For example, sending building maps to firefighters on the scene or mug shots to police officers.
On May 5, Governor Pataki announced the commitment of $10 million dollars in funding from the Empire State Development Corporation to build a high-speed wireless network in Lower Manhattan. The announcement was made in response to a proposal by the Downtown Alliance for the development of a redundancy system that would allow telephones and the Internet to function in an emergency. The network reportedly would be the first such project in a major business district in the country.
“To further help businesses thrive in the post September 11th world, we must make Lower Manhattan into a commercial district with truly cutting-edge telecommunications infrastructure," Pataki said. "Let’s install a wireless data network that will enable downtown’s businesses to broadcast their data through secure channels to satellite locations."
The “Lower Manhattan Wireless Redundancy System” is intended to make the telecommunications infrastructure more reliable and resistant—allowing businesses to continue to be connected with the world during a disruption. Wireless technology uses airwaves—instead of fiber optic cables or copper wires--to send communications over the Internet. While the network is primarily intended for data, it could also be used for voice.
The state funding will cover the basic infrastructure--roof-top antennas on Lower Manhattan’s tallest buildings—that could be put in place in about six months. The antennas would be connected to locations other parts of Manhattan, Brooklyn or New Jersey. The network uses laser light, non-visible infrared wavelengths and radio microwaves to send signals up to one mile without wires—significantly farther than wireless â€hot spot’ technology which only ranges between 300 and 1,000 feet.
Since September 2003, the Downtown Alliance has been operating a free public wireless network that has eight â€hot spots’ in Lower Manhattan including Bowling Green Park, City Hall Park and South Street Seaport.
Both small and medium-sized businesses and large corporations benefit from these networks because they are inexpensive, secure and reliable. However, large corporations are unlikely to move to Lower Manhattan without a back-up communications system. Thus, the new project is vital for maintaining the economic competitiveness of downtown New York as a thriving business district. It will also insure reliability for public safety communications in an emergency.
At a summit earlier this month at Baruch College, City Council Speaker Gifford Miller announced the results of a survey on the city’s emergency preparedness. The survey showed that out of 160 community organizations, over 70 percent have not been informed by the City on how to prepare for an emergency.
“Unfortunately, New York City still does not have a comprehensive, coordinated and borough-oriented system to recruit, register and deploy emergency volunteers,” said Speaker Miller. “That over 90 percent of community organizations have never been informed by the city on how to become emergency volunteers is wholly unacceptable. The city must do more to assist neighborhoods and improve these organizations’ ability to offer community residents real emergency preparedness.”
More details about the summit can be found on the council’s new Web site http://www.nyccouncil.info. The new site is a welcomed improvement because the Web address is much easier to remember and it has a number of useful features, as Speaker Miller himself points out in an article for Gotham Gazette, The Rise of the E-Citizen. Laura Forlano is a doctoral student studying communication technology policy at Columbia University.
New York City Council Stated Meeting Report
Every two weeks the New York City Council meets for its Stated Meeting to introduce and pass legislation. As a regular feature, Searchlight covers these meetings and posts a summary of the bills passed.
STATED MEETING - May 19, 2004
Quote of the Day:
"I know that this is not sexy and I don't expect to see it on page one, but this package [of bills]... is one of the most significant changes we've made in city government in two and half years." - Councilmember Lew Fidler on the bills to reform the city's contracting rules.
Meeting Summary:
The contracting and purchasing rules that govern how the city spends nearly $9 billion a year have been described as bureaucratic, corrupt, and archane.
Non-profit organizations argue that payments from the city are routinely late (an owner of a day care center in the Bronx once testified that she pawned her jewelry to pay her rent because the city was six months behind). Politicians charge each other with using contracts to play political games. And many argue that government contracts are full of fraud.
Nearly everyone in city government agrees that reform has been needed; the debate has focused on how is should be done and who should do it.
Last year, Mayor Michael Bloomberg asked New Yorkers to vote on a ballot initiative that would revamp the city's contracting rules. City Council members argued that the reform should go through the legislative process, not be decided by voters who do not understand the complex laws. The council also offered a package of bills that they argued would achieve the same goals in a more effective and open manner.
On Election Day, voters defeated the contracting ballot question, in part because opponents lumped several of the mayor's ballot initiatives together - including the most controversial one to establish non-partisan elections.
On May 19, 2004, more than seven months later, the City Council voted on its contracting reform package. The measures passed unanimously by a vote of 50 to 0.
Members promised that the 12 bills will:
- Streamline the city's contracting process
- Put more of the bidding and contracting process online
- Provide for timely and efficient distribution of funds
- And establish public hearings on specific contracts.
"This is good for New York City and will save New York City taxpayers a lot of money," said Councilmember Robert Jackson, head of the contracts committee.
The City Council also voted to override Mayor Bloomberg's veto of a bill (Intro 179) that requires the Department of Sanitation to notify residents of the times that they will be in the neighborhood to issue violations for littered sidewalks. Some homeowners have complained that they leave their house for several hours and return to find trash on their sidewalk and a fine stuck to their door. The council has dubbed it the "Fair Fines Bill."
"Everybody wants clean streets in the city," said Speaker Gifford Miller. "But people shouldn't have to sit at home and stare out their window 24-hours a day in order to be sure they are complying with the law."
The council overrode the mayor's veto by a vote of 50 to 0. Mayor Bloomberg has said he will take the issue to court.
The next Stated Meeting is scheduled for June 7, 2004.
For an archive of past meetings and council votes, visit Gotham Gazette's Searchlight.
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Republican Policies: An Insult and an Injury
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It seemed like a good idea at the time.
For the first time in its 150-year history, the Republican Party agreed, in January 2003, to hold its national convention in New York City.
From the party's perspective, a meeting less than four miles from Ground Zero could subtly remind the nation of President George W. Bush's leadership in a time of crisis. The Republicans could also wrap themselves up in the diversity of the city.
From the city's viewpoint, the convention would bring tens of millions of dollars into the economy and tell the nation that New York was back in business after the September 11, 2001, attacks. "This is an incredible boost to New York," Republican Mayor Michael Bloomberg said in announcing the party's decision.
Some people still think it is a good idea. But, as the convention approaches and details are being announced, others on both sides may be asking whether having the GOP in NYC will wind up having more costs than benefits.
Democrats have had their national political convention in New York City five times (see column, right), while Republicans never have. This should not be too surprising: Even though we are now in our 10th straight year of Republican mayors, no Republican presidential candidate has carried the city since 1924, only one of the city's 13 members of Congress is a Republican, and Democrats outnumber Republicans in the city by a five-to-one margin.
To overcome such obstacles, Republican Bloomberg launched an energetic campaign lobbying the national Republicans, along with concrete inducements. He treated members of the selection committee to breakfast at Tiffany's, arranged for them to receive notes from Broadway stars and enlisted Republican hero and former Mayor Giuliani in the campaign. To a party wary of government spending, the city held out the promise of a convention financed by rich donors - not taxpayers.
They said they would construct a temporary media center in the James A. Farley Post Office linked to Madison Square Garden by a pedestrian bridge, thereby creating another irony since Farley was chair of the Democratic Party. City Hall noted the city could offer 22,000 hotel rooms, thousands of them renting at an average of $156 a night. Labor unions promised they would not strike.
The campaign worked. But some Republicans clearly have never felt comfortable about the prospect of being in alien territory. "Most of the people I deal with are Democrats," said William D. Harris, an Alabaman who serves as chief executive officer of the convention. "No question - we are in New York City. But the people here want this convention to be a success - maybe not for the same reason that I do."
"I just hope the lights will be turned on at Madison Square Garden," another party activist told Christian News Service.
Last fall, House Majority leader Tom DeLay announced plans for 2,200 delegates to stay, not in city hotels, but on a cruise ship in the harbor - far from the streets (and the people) of New York City. Following protest from Bloomberg and general uproar, he backed down.
The rifts between New York and the Republicans deepened earlier this year when Bush announced his support for a constitutional amendment that would ban gay marriage. Most New York Republicans, including Giuliani and Governor George Pataki, denounced the move.
At the same time, testimony before the 9/11 commission and unrelenting bad news from Iraq have tarnished Bush's image as a courageous fighter against terrorism.
But the Bloomberg administration says this Republican Party in a Democratic town will not be about politics, but about money. And apparently many New Yorkers agree. In Quinnipiac University poll conducted in January and February of this year 67 percent of New Yorkers - and even 62 percent of Democrats - said that playing host to the convention would be good for New York.
The budget for this year's Republican convention is expected to total some $91 million. Of that, about $15 million will come from the federal government, which will also give money to the Democrats for their convention in Boston. The delegates pay their own housing and meal costs, according to Rori Patrise Smith, spokesperson for the convention.
A host committee has raised about $70 million to cover such expenses as space rental and the podium where Bush will probably make his acceptance speech. The committee includes some Republican fund-raisers, but Bloomberg also selected Jonathan Tisch, chief executive of Loews Hotels, a registered independent who reportedly has contributed $425,000 to various Democratic Party campaigns. "This is not about politics, it's about jobs,'' Tisch told Bloomberg News Service. Bloomberg himself has given $5 million.
According to NYC and Company, the city's official tourism agency, the convention will bring about 50,000 people - including 15,000 members of the media -- to New York City and generate more than $150 million in economic activity for the city in late August, when most tourists prefer cool beaches to hot city sidewalks. In addition, the convention could create 1,800 temporary jobs, and produce $10 million in tax revenues.
Dan Pisark, vice president for retail services of the 34th Street Partnership, said his members expect the convention to boost business. The delegates and the media "need batteries and film and they need to have lunch," he said. I would hope they might go shopping."
Businesses and institutions across the city hope to cash in. The Metropolitan Museum of Art is rented out for several evenings, while the Edison Electric Institute, a trade group, has reportedly booked the Central Park boathouse for a cocktail party. The general manager of 21 expects his 10 private rooms to be rented that week.
To pull in more money, the city has launched a "Come Early, Stay Late" drive aimed at getting conventioneers to extend their stays. It will include discounts at hotels, other businesses and museums.
And the city could help sell New York City to the rest of the nation and the world. "I personally believe that the 1992 convention helped turn the city's fortunes around," Deputy Mayor for Economic Development Daniel Doctoroff told the New York Observer. "After years of bad news, people began seeing it as an exciting and interesting place."
And now, Bloomberg said, the 2004 Republican convention could show "that if you want to promote your ideas and visions for the country, there is no better way to do it than New York."
But some experts express skepticism. In predicting convention dollars, most cities do only half the calculation, says Fred Carstensen of the Connecticut Center for Economic Analysis at the University of Connecticut. They add up the money that will come in but do not consider how much the city would have gotten anyway - how many hotel rooms would be occupied without the convention, for example. They also do not calculate expenses, such as the loss of productivity from workers who cannot get to their jobs during the convention.
A study by the Beacon Hill Institute at Suffolk University in Boston concluded that the Democratic convention will cost that city $12.8 million. Even though the gathering from July 26 to 29 will bring in about $113 million, it will force the cancellation of other events, such as a tall ships extravaganza that was supposed to bring 500,000 visitors to the waterfront. The closings of Interstate 93, the city's major north-south highway, and of North Station, a hub for commuter rail and subway service, will also prove costly.
Doing an off-the-cuff analysis, Carstensen expects the Republican convention could be a net loss for New York in purely financial terms. It could have value in demonstrating "that New York City is functioning and thriving and you should come," he said. "But I'm not sure that's much of an issue anymore."
And of course, one only has to recall the chaos in the streets and the police rampage at the Democratic convention in Chicago in 1968, to see that a convention has the potential to damage, as well as boost, a city's reputation.
The biggest concerns about this convention center around safety. Although the FBI has not reported any specific threat to the convention, the bombings of commuter trains in Madrid a few days before Spain's elections heightened fears that terrorists might target this year's U.S. presidential campaign.
This presents police and other security agencies with a daunting challenge. They must keep conventioneers safe and allow them to go about their business, while protecting the rights of political protesters and of New Yorkers who need to go about their daily lives.
Police Commissioner Raymond Kelly says it is nothing that the city cannot handle. "There are 600 events of significant size in Manhattan below 59th Street every year; we handle these things all the time," he said in a recent speech. (See Counterterrorism, Crime Prevention and Community Relations)
And the convention organizers express confidence too. "New York is used to hosting high profile events," said convention director of communications Mark Pfeifle said.
City officials have offered widely varying estimates of how much security for the convention will cost, ranging to a high of $65 million. Of that, the federal government will pick up about $25 million. The city had anticipated that it would then need to cover about $22 million, but the number could go higher. Some 10,000 police will work the convention.
The federal government has declared the convention a National Security event, meaning the Secret Service will coordinate the activities of various law enforcement and security agencies. But disputes have arisen over who is in charge of what and how much of the city to shut down during the convention.
Convention officials - and reportedly the Secret Service as well – tend to favor sweeping restrictions. City officials, including Bloomberg and the police department, want to minimize disruptions that could antagonize city residents and cost city businesses money.
So, for example, the Secret Service apparently wanted Penn Station shut down during Bush's acceptance speech on September 2. The police department did not.
Penn Station will remain open. But all trains entering the facility – which serves seven subway lines, commuter trains from Long Island and New Jersey and Amtrak – will be stopped and searched by police and bomb sniffing dogs.
A similar dispute arose earlier this month over the so-called outer perimeter, a security zone around the convention site. At a recent briefing for the press, Mark Miller, chief of operations for the convention, said access to sections of Eighth Avenue and perhaps Seventh Avenue could be closed during the convention. The perimeter, he said, "won't be measured in terms of feet or yards but in blocks.”
The mayor quickly responded that no such decision had been made. "The police department is the one that is deciding how we go about ensuring safety, as well as minimizing the impact, nobody else,” Bloomberg said at a press conference the next day. He added that anyone else commenting on security arrangements was speaking "without knowledge.”
Concerns about security will inevitably come up against demands by tens of thousands of people seeking to demonstrate during the convention. It has become a magnet for groups (see box): opponents of the war in Iraq and New York City police and firefighters upset about federal security funds and their contracts with the city. Not in Our Name, a group formed to protest the government's response to 9/11, wants to see "more than a million in the streets when the Bush team meets" to protest many administration policies, and the Still We Rise coalition of AIDS, housing and other groups has set a poor people's march and rally for August 30.
Some protestors want to go beyond rallies and marches to so-called direct action. "If past actions are any indication, New Yorkers can expect to see people sitting down in the middle of the street, blocking corporate entrances or bridges or making the lives of visiting Republican delegates a living hell," Matthew Leisings writes in indymedia newswire.
Others take a more unusual approach. World War 3 Arts in Action hopes to paint murals to "bring attention to the arrival of Republicans in NYC and their intentions to capitalize on the tragedy of September 11th."
Billionaires for Bush will promote an agenda of "Blood for Oil," "Leave no Billionaire Behind," and "Small Government – Big Wars." And Tom Harker -a.k.a. Ukulele Man is coordinating "a ukulele action against the RNC."
By the end of April at least 12 groups had requested permits for marches or rallies on city streets from the Police Department. The department does not expect to rule on any of them until next month.
But late last month, the parks department denied United for Peace and Justice, a national group opposed to the war in Iraq, a permit to hold a rally on Central Park's Great Lawn the day before the convention. The department said it wants to protect the grass from 250,000 pairs of marching feet, but even many who oppose the rally's goals criticized the city. "'Keep Off The Grass' appears nowhere in the First Amendment," the New York Post said in an editorial. "If the lawn is harshly used, the solution seems clear enough: Plant a new lawn. Grass seed is cheap.”
While the parks department has offered Flushing Meadows Park for the rally, United for Peace and Justice has asked the mayor to step in and allow the rally on the Great Lawn.
In general, protest organizers profess skepticism of the city, citing repeated problems in obtaining protest permits from the Bloomberg administration. There has been "a long-term tightening of the screws," said William Dobbs, spokesperson for United for Peace and Justice.
The involvement of various law enforcement agencies further complicates the picture, according to Jeff Fogel of the Center for Constitutional Rights, which helps groups get protest permits. "The Secret Service is supposed to be involved but they won't talk to anyone," Fogel said.
For its part, the city has reiterated that it will allow protests.
To prove that a Democratic city can welcome a Republican convention, party officials like to point to Philadelphia Mayor (and now Pennsylvaniua Governor) Ed Rendell, a Democrat, who, they say, enthusiastically boosted the Republican convention in that city in 2000 and helped make it a success.
But they neglect to add one thing: When the Republicans left town, Rendell helped spark a successful get out the vote drive that played a major role in delivering Pennsylvania to the Democrats in November.
As a Republican, Bloomberg cannot have it both ways. A successful convention for Republicans may not strike many Bush-bashing New Yorkers as a success - particularly if they cannot get to work on August 30 or are hassled by police at a protest.
"The mayor is starting to get the reality of how much people hate Bush in this city," former Clinton administration member Sarah Kovner told the Times. "I think they will be sorry they asked for this convention."
Bloomberg does seem to be putting some distance between himself and the festivities in Madison Square Garden.
When asked on National Public Radio about his plans for those three days, he said, "I am not a particularly political guy. I will be spending the convention outside, with the police, to make sure the protesters have their ability to protest but they don't disrupt the lives of others."
Republican Sites
2004 Republican Nation Convention:
The convention's official web site, it includes information for the media and for delegates to the convention.
Bush Cheney '04:
The official re-election campaign web site. It gives New Yorkers the opportunity to see ads that will be not aired here.
Republican National Committee:
The party's web site offer the latest campaign comments by President George W. Bush and a Kerry vs. Kerry 'boxing' match, featuring Don King as announcer.
NYC Host Committee:
The non-partisan group raises money for the convention and serves as a link between New York businesses and organizations and the convention. Visitors to the site can sign up to volunteers at the convention.
Democratic Sites:
Democratic National Committee:
The official web site, featuring critiques of Bush policies and explanations of what Democrats support.
John Kerry for President:
His official campaign web site, with information about the Democratic candidate's life and his statements on issues. Like Bush's site, it gives New Yorkers a chance to see the ads that will not be aired here.
Activists and Protestors
(a partial list):
Billionaires for Bush:
A satirical street theater campaign designed to draw attention to the Bush administration's economic policies.
Counter Convention:
A collective of city activists interested in helping people protest the convention. The site includes logistical information, a calendar of events and boards to post housing and ride requests.
Not in Our Name :
A national network of people and organizations opposed to U.S. military actions overseas, detention of immigrants and what it sees as assaults on civil liberties, such as the Patriot Act. It wants a million people to take to the streets of New York during the Republican convention to protest "trying to use the grief of 9-11 to advance an agenda of horrors."
RNC Not Welcome:
A group of New Yorkers opposed to having the convention in New York. A collective, it operates a list serve that members use to exchange information and ideas about protesting the convention, from tactics to how to find a place to stay.
RNC Watch:
Produced in conjunction with the NYC Indymedia, this website features news about the convention, including Republican plans and reports on security and protests.
Shadow Protest:
This web site, the brain child of computer consultant and former Democratic committeeperson David Lynn, encourages people to sign up as volunteers for the Democratic and Republican conventions - and then not show up for their assignments. "The intent is to cause chaos for the convention planners," Lynn says.
Still We Rise:
A coalition of groups working on AIDS, housing and income issues. It plans a Poor People's March and Rally for Justice on Aug. 30, the first day of the convention.
United for Peace and Justice:
The group, a coalition of local and national groups opposed to the Bush administration's foreign and domestic policies, has scheduled a march followed by a rally in Central Park on Aug. 29, the day before the convention. The park department rejected the request for a permit for the Great Lawn, but the group plans to appeal.
A Brief History of N.Y. Republicans |
The Republicans are coming here to celebrate their agenda. But what is that agenda as it affects New York City?
The Republicans are going to cut federal subsidies for housing for poor people -- Section 8 housing -- which very seriously affects New York because we have such a high percentage of people in rental housing.
They are going to put limits on how long people can stay in public housing. New York's public housing is a success -- one of the few public housing programs in the country that is. Why? Because people do not have to move out of public housing if they succeed. They can stay and make a community. The Republicans are determined to destroy that community by requiring that people leave.
The Republican agenda includes spending billions of dollars for the Iraq folly, money that could otherwise go toward urban development. The Republican agenda includes no funding -- zero funding -- for its No Child Left Behind for our schools. This sounds great: We are going to leave no child behind, but not get any money to do it.
Tax cuts for the wealthy soak up money that might otherwise have gone for social needs. New York is one of the cities that take people who come from other countries and turn them into Americans, a job we perform for the rest of the country. And we do a very good job of it. But that requires money for the social accommodations that have to be made. The Republicans have cut lead-paint programs. How can you cut programs that try to reduce the number of children who are harmed by the presence of lead where they live or go to school?
The Patriot Act hit particularly hard in a city filled with immigrants from all over the world. The Republicans actually defend the notion that I -- or anyone else -- could walk out onto the street, get arrested for no reason with no explanation given and be held on the president's say-so that this person is an enemy of our country or is conspiring with enemies of our country. No lawyers, no family knows, no public disclosure as to the location of that person -- forever. It is like the Middle Ages. It is like Richard the Lionhearted coming back from his crusade and being held in a dungeon. It is incredible that anyone could, number one, do this and, number two, defend it.
An attack is underway on the great labor accomplishments of making work a dignified activity and providing workers with the benefits that they get from organized labor. The push to move Americans jobs to countries where workers earn less money and have fewer protections undermines the gains U.S. workers have made.
This summer, the Republicans are coming to New York to celebrate this agenda in our front yard. Imagine that a family that has insulted and abused another family has a picnic in the family's front yard. That is what they are doing to New York. It adds insult to injury -- injury that is substantive and plentiful.
There is another New York -- beyond Radio City Music Hall, beyond Broadway, beyond Yankee Stadium. Councilmember Bill Perkins plans to invite the Republicans to come and view that New York. To view the New York of the homeless intake center. To see an emergency room in one of our city hospitals at about 3 o'clock in the morning. To see an overcrowded classroom with a teacher trying to teach kids who speak eight different languages to function as a group -- without any help from No Child Left Behind. To see a drug rehab program with people who are trying to rebuild their lives with precious little help.
We are being invaded by people who have come to celebrate an agenda that attacks us. It is insulting. I think we should tell them that.</>
Ed Sullivan is a former member of the New York State Assembly from Manhattan.
Republican Policies: An Insult and an Injury |
The choice of New York City as the site for the Republican National Convention this year is both politically and historically correct.
After all, the modern Republican Party in America owes much of its beginnings to Republicans from New York. Names like Greeley, Seward and Corning figure heavily in party annals.
Influential editor Horace Greeley of the New York Tribune was one of the first members of the new Republican Party when it surfaced in 1854 and pressed hard to prevent slavery from expanding into the country's new territories. Greeley and Erastus Corning, a founder of the New York Central Railroad, played significant roles in delivering the 1860 GOP nomination for president to Abraham Lincoln of Illinois. William Seward, a U.S. senator, was one of the most prominent New Yorkers in Republican politics and a contender for the Republican nomination. (He would go on to serve as Lincoln's secretary of state.)
New York City was where, in 1859, Lincoln, fresh from his brilliant performance in the famous Lincoln-Douglas debates, turned up at Cooper Union to continue his attacks on the spread of slavery. At that point, Lincoln was an unannounced political aspirant. With closely reasoned phrases, Lincoln examined the origins of sectional strife and the inconsistent positions of Senator Stephen Douglas and the United States Chief Justice Roger Taney. He called on his fellow Republicans to resist Southern demands to recognize slavery as being right, but rather to "stand by our duty fearlessly and effectively."
The Cooper Union speech, reported immediately around the country by telegraph, concluded with this appeal: "Let us have faith that right makes might, and in that faith, let us, to the end, dare to do our duty as we understand it."
His reasoned and eloquent presentation electrified the 1,500 New Yorkers who heard him and gained Lincoln valuable support in Seward's home territory.
New York Republicans also take pride in Theodore Roosevelt of Long Island, a New York legislator and New York City police commissioner while still a young man. He came to national attention as the leader of the legendary 'Rough Riders' during the Spanish-American War. Roosevelt came home from the war a hero and was elected vice president under William McKinley. He acceded to the presidency at age 42 when McKinley was assassinated in September 1901. He gained fame quickly through his activist agenda, including 'trust busting' and advocating laws aimed at breaking up monopolies in big business. He directed his progressive reforms at regulation, not abolition, of big business.
New York City itself witnessed the exploits of Republican Fiorello H. LaGuardia, who won national attention as mayor of the metropolis from 1933 to 1945. Before he won national renown as a reform mayor, LaGuardia flew a fighter plane for the American Army in World War I.
Running for mayor on the Fusion Party ticket, LaGuardia confronted the excesses of the then-notorious Tammany Hall and won numerous municipal reforms. Known as 'the Little Flower' (from his first name), he came to national attention for his successful reforms. LaGuardia also had a humorous side. During a newspaper strike in the 1940s, he went on the radio and read the comic strips to children who had missed seeing what he called "the funny papers." Noting that comic strip police detective Dick Tracy was slim and trim, LaGuardia, during the broadcast, asked his police commissioner why New York City detectives were overweight.
Two 20th century Republican governors, Thomas E. Dewey and Nelson A. Rockefeller, earned national attention and achieved notable objectives.
Dewey, governor from 1943 to 1955, first came to prominence as a Manhattan district attorney. He was lauded for his aggressive and successful prosecution of gangland bosses who had become powerful during the Prohibition Era. His vision and leadership led to construction of the 641-mile New York State Thruway, one of the first major superhighways in the United States.
Dewey surged to national attention when he ran for president in 1944 against incumbent Franklin Roosevelt, also a famous New Yorker. Dewey lost, then ran again against Harry Truman in 1948, losing again in a close race.
Nelson Rockefeller was governor of New York for four terms - from 1959 to 1973. His many achievements included the start of a successful campaign to clean up New York's rivers and lakes through improved sewage treatment and the modernization of the State University of New York system.
Rockefeller sought the presidency three times in the '60s, but his liberal philosophy did not find favor with the GOP nationally. In the aftermath of the resignation of President Nixon in the Watergate scandal, President Gerald Ford chose Rockefeller to serve as vice president.
While New York City has had Democratic mayors for most of the late 19th and most of the 20th Century, three men were elected in the last 40 years under Republican aegis. John Lindsay held the office from 1966 to 1973 and won national recognition for his efforts to help calm racial unrest in the 1960s.
Rudolph Giuliani, who was elected mayor in 1993, first won wide attention when, as a federal prosecutor in Manhattan, he gained convictions of underworld leaders and business leaders who had broken the law. But it was Giuliani's epic performance as mayor following the 2001 terrorist attacks on the World Trade Center that made him a household name around the world. He is widely credited with having demonstrated courage and leadership during one of the darkest hours in New York City history.
Giuliani's nationwide popularity after the September 11, 2001 attacks helped propel current Mayor Michael Bloomberg's successful effort to win office in the 2001 elections. Since then, Bloomberg has won praise for his efforts to improve education, business, and tourism in New York City.
These Republicans exerted a strong influence on the lives and fortunes of the people of New York. Their part in the history of the Empire State helped to make it a successful state and a natural place for the Republican Party, the 'Grand Old Party,' to hold its 2004 nominating convention.
John Marchi, a Republican state senator from Staten Island since 1957, is the nation's longest serving state legislator.
Last month, the news broke that the Statue of Liberty remained shuttered for nearly three years, while the Statue of Liberty–Ellis Island Foundation guarded a $30 million endowment and paid its top executive annual salaries of nearly $300,000. Press reports questioned why--instead of dipping into its assets to reopen the symbol of freedom as quickly as possible in the wake of 9/11--the foundation launched a $7 million campaign to improve security. The foundation’s fundraising and spending activities are now under federal investigation.
This is just the latest act in government efforts to increase the financial accountability of foundations and other nonprofits, including many grantmaking organizations with cultural programs as well as museums, dance companies, and theaters. In 2003, the House and Senate passed proposals that would create tax incentives to spur charitable donations, but also would force foundations to increase the amount they give away each year as a percentage of their assets. The legislation was widely viewed as spillover from congressional efforts to tighten regulations of the for-profit sector.
After these proposals stalled in Congress, New York State Attorney General Eliot Spitzer appealed to the statehouse to introduce legislation for nonprofits similar to the Sarbanes-Oxley Act, which Congress passed in 2002 in the wake of Enron and other corporate accounting scandals. The legislation passed in different versions in New York’s State Senate and Assembly, but remains in committee. If it becomes law, it would affect most of the city’s foundations and larger nonprofits.
Sarbanes-Oxley applies to publicly traded companies and their auditors, and is designed to protect the interest of the shareholding public. The proposed nonprofit reforms ostensibly would protect the interests of private, government, and corporate donors. After press reports about nonprofit mismanagement, there is some evidence that donor faith has eroded. According to Charity Navigator, a watchdog group, 42 percent of Americans now say they have less confidence in charities than they did before 9/11. In announcing the legislation last January, Spitzer argued for the need “to ensure the integrity of this sector or else people’s contributions will decline.” The legislation would require nonprofits to certify their financial data, appoint audit and executive committees, and demonstrate that members of these committees are free of contracting relationships with the nonprofits they serve.
But while Spitzer cites a “crisis of accountability” in the nonprofit sector, many perceive excessive zeal on the part of a man who has gained power and fame as the state’s top-cop. “There is some flaky management [in the nonprofit sector],” says Norma Munn, chair of the New York City Arts Coalition. “Some very talented managers have less accounting knowledge than is needed when they are in jobs where they have to take on every task. But I have only encountered one instance of dishonest management.” As director of an artists’ credit union, Munn cites extensive experience in certifying the financial records of nonprofits. “The proposed state legislation sets up further regulating apparatus for which I don’t see a need—I don’t see problems, don’t hear about problems, and don’t perceive problems in my dealings with nonprofit groups.”
Spitzer’s supporters argue that, while most nonprofits operate within the boundaries, some engage in questionable accounting practices that the public would find inappropriate. “After Sarbanes-Oxley and the attention being given to the financial dealings of for-profits, we anticipated that this would happen,” says Jonathan Small, executive director of the Nonprofit Coordinating Committee of New York (NPCC), an umbrella organization with 1,200 member groups. “Rather than attacking the proposal wholesale, as some were urging us to do—saying that the nonprofit sector is already regulated enough—we felt that it would be wise to comment on the proposal, and try to shape it in a constructive way.”
Some nonprofits have very large boards, and some members of those boards may take only occasional interest in management practices. The proposed legislation seeks to create smaller numbers of individuals who feel greater responsibility for the governance of the organization. It would mandate the creation of audit committees or require that nonprofits change their by-laws to have full boards serve as such. It also would require the creation of executive committees when there are more than 25 board members.
Nonprofits already go through many layers of financial review—for their own auditors, the auditors of grantmaking organizations, the IRS, and annual reports. Some argue that further review would prove too burdensome on organizations in which resources are often stretched thin. Originally, the proposed legislation would have required verification of financial information for organizations with annual revenues in excess of $250,000, but after comment from the Nonprofit Coordinating Committee of New York and others the ceiling was raised to apply to groups with annual revenues over $1 million or assets over $3 million.
“Our concern was that nonprofits that already have adequate procedures in place to certify their financial controls will—because of their concern to abide by new regulations—spend extra money to do further review, hire experts, and thus divert money from their programs,” says Small. “We were concerned that the cost-benefit of this may not be worth it.”
The legislation would strengthen regulations relating to interested party transactions, or transactions between a nonprofit and a director doing business with a nonprofit. A statement on the Nonprofit Coordinating Committee website expressing support for this regulation points to such transactions as “the area in which the worst nonprofit board conduct occurs.”
“Say a board member sees that a nonprofit needs to rent some office space, and says that he has some available for $35 a square foot,” Small explains. “The nonprofit director might think, â€He says that’s a good price, he’s a good person, let’s take it.’ But maybe it isn’t a good price, and the nonprofit has been taken advantage of. This legislation gives the attorney general the ability to ask the board for evidence that the transaction was â€fair and reasonable’ and to overturn it if it isn’t.” Under current regulations, if a board approves an interested party transaction, it’s very difficult for the attorney general to overturn it.
But some argue that this regulation will have a chilling effect on board development. “The interested party regulation seems to offer the possibility that relations between personal donors on boards and organizations will be viewed as suspect,” Munn says. “This has the potential to scare away board members.” In the still-tough fundraising environment, strong boards are crucial to the stability and long-term planning of nonprofits. Particularly for arts groups, board members often bring much-needed financial or legal expertise.
Given the fact that Albany lawmakers may not be inclined to do Spitzer’s bidding, there may not be action on this legislation in the near future. But the threat of action already has spurred change. In February, Independent Sector, a national coalition of nonprofit organizations and foundations, released a code of ethics to its members as a model for members in their governance and operations. Many groups have adopted versions of the code.
And, though foundation executives and nonprofit directors argue that further regulation of their sector is not needed, they acknowledge that they need to do a better job of explaining their financial realities and management practices, and the benefits they offer, to the public. Arts groups can draw on a decade of research—undertaken since the culture wars put culture on the defensive—showing that the arts reaps significant tangible rewards to communities and local economies.