special report

PAC-Man de Blasio Gobbles Up Donations from People with City Business

Mayor Bill de Blasio walks back to City Hall, March 7, 2019. Photo: Ben Fractenberg/THE CITY

Mayor Bill de Blasio is personally soliciting donations for his political action committee – reaping money from sources that include individuals seeking favorable treatment from his administration, an investigation by THE CITY found.

The revelations about de Blasio’s Fairness PAC – which he’s using, in part, to pay for travels exploring a presidential bid – followed the city Department of Investigation’s finding he broke city ethics rules in a previous fundraising campaign.

Mike Casca, a Fairness PAC spokesperson, confirmed the mayor is personally seeking donations for the group. Each donor’s name is run through the city’s database of entities doing business with City Hall, said Casca, adding the PAC won’t accept a check from anybody on the list.

But the so-called Doing Business database, which includes only top executives involved in certain transactions, is hardly complete.

A basic search of other databases – including the list of lobbyists – revealed multiple examples of donors who were pressing de Blasio’s team on active projects while writing checks to his PAC, THE CITY found.

Meanwhile, the mayor is working the phones.

His public schedule for August through December shows a total of 125 hours dedicated to fundraising phone calls. His “Call Time” included 38.5 hours in August, 25 hours in September and 38 hours in October. It’s unclear how much of this time was dedicated to Fairness PAC fundraising.

Casca said the “mayor voluntarily set out a strict standard” in declining donations from entities in the Doing Business database, and criticized the examples uncovered by THE CITY as overly broad.

But Betsy Gotbaum, executive director of the government reform group Citizens Union, said the mayor and his Fairness PAC need to be more vigilant in assessing potential donors.

“They should be extremely careful not to ask anybody – or to double-check to make sure people are not – doing business or trying to get business with the city,” said Gotbaum, a former city public advocate. “[The mayor] should not be asking them.”

Transparency Issues on Conflicts Guidance

A  DOI report filed in October concluded de Blasio had violated city conflict-of-interest rules by personally soliciting donations for his now-defunct non-profit Campaign for One New York from entities with business pending before the executive branch.

DOI found the mayor had twice been warned not to do that – and detailed his pursuit of checks from several developers who, at the time, were pursuing favorable treatment from City Hall.

With Campaign for One New York, the mayor released a letter he got from the city Conflicts of Interest Board spelling out the rules for his fundraising.

With Fairness PAC, the group’s lawyers sought unspecified “advice” from COIB, but Casca declined to provide details.

Casca said only that the PAC’s lawyers did not ask about fundraising because they believed that was covered by the state Joint Commission on Public Ethics and the Federal Election Commission. They “did seek other advice,” which he wouldn’t describe, and dubbed COIB’s guidance to the Fairness PAC as “privileged communications.”

THE CITY reported last week that Campaign for One New York is the subject of an ongoing Joint Commission on Public Ethics probe.

Questions on Vetting Process

A key finding of DOI’s report on de Blasio’s Campaign for One New York fundraising was the group’s failure to adequately check potential donors to see whether they had business with City Hall. In the first three months, during which de Blasio raised $1.37 million, DOI found there was no vetting process.

The vetting procedures for Fairness PAC, which raised $470,000 through the end of 2018, appear far from comprehensive.

THE CITY easily found multiple Fairness PAC donors who – at the same time they were writing checks for the mayor – had lobbyists on retainer pressing City Hall for agency approvals related to their projects, including zoning changes and tax breaks.

The homepage for the Fairness PAC
The homepage for the Fairness PAC Photo: Screenshot of billdeblasio.com

Take the law firm of Abrams Fensterman. In the fall of 2018, two partners wrote three checks totaling $15,000 for the mayor’s PAC. At the time, they’d retained two lobbyist firms, Bryan Cave and Suri Kasirer, to influence the Office of the Mayor on zoning changes that could significantly impact their real estate clients.

One of the clients, Cactus Holdings, boasts of controlling 2 million square feet of real estate in the New York metro area.

The firm’s managing partner, Howard Fensterman, wrote one of his two $5,000 checks to Fairness PAC on Nov. 6 –  the same day lobbyist Kasirer filed a disclosure report noting her intended “targets” included then-Deputy Mayor for Housing & Development Alicia Glen and James Patchett, head of the city’s Economic Development Corp.

Fensterman declined to discuss whether the mayor personally solicited donations from him and his partner, Frank Carone, a longtime de Blasio supporter.

The firm’s spokesperson, Lisa Linden, wrote in an email: “We do not discuss our clients’ business with the mayor, and any activities that are properly recognized to be lobbying are reported as required to the appropriate City agencies.”

She added, “We have been active in civic affairs in Brooklyn for a long time, and have supported Brooklynite Bill DeBlasio (sic) since 2009 – before he ran for Mayor – and plan to continue to do so. That support includes contributions to the Fairness PAC.”

Lobbyists Work for Donors

Developer Gary Feldman of Circle F Capital wrote a $5,000 check to Fairness PAC on Nov. 3. At the time, his firm had lobbyist James Capalino on retainer to press the city Department of Transportation to green-light a loading zone and curb cuts at a $46 million, 11-story condo tower he planned to build in Long Island City, Queens.

Feldman did not respond to questions about the donation from THE CITY.

Another developer, Kevin Maloney of Property Markets Group, and an individual named Tania Babic who listed the same address as Maloney, each wrote $5,000 checks to Fairness PAC on Aug. 29.

In 2016, Property Markets hired lobbyist Bryan Cave to lobby Glen, a housing commissioner and the City Planning Commission on what they described as their “Gowanus Canal project.” Since then the company has bought up several properties in that area.

The city is currently weighing a major rezoning in that Brooklyn neighborhood that would significantly impact the value of those properties. Maloney did not respond to questions submitted Wednesday by THE CITY about his donation.

A Tale of Two Hotels

The owners of the famed Chelsea Hotel in Manhattan, Ira Drukier and Richard Born, and their wives each wrote $5,000 checks to Fairness PAC on Aug. 29 for a total donation of $20,000. At the time, they were embroiled in a dispute with tenants of famously scruffy hotel, which they were trying to renovate into luxury lodging.

City buildings department officials responded repeatedly to complaints that ongoing construction was creating dangerous conditions. That summer, the department issued multiple violations. One DOB “safety sweep” occurred on June 4, just a few weeks before the hotel’s owners took out their checkbooks for the mayor’s PAC.

The department ordered work stopped there in November, but rescinded the order a few weeks later. Since then, four tenants have filed a lawsuit alleging that the Department of Buildings has improperly granted the hotel owners permits despite ongoing problems.

Drukier and Born did not return calls seeking comment.

The Chelsea Hotel, April 24, 2019.
The Chelsea Hotel, April 24, 2019. Photo: Ben Fractenberg/THE CITY

Buildings officials declined to comment on the Chelsea Hotel because of the litigation, but said their general mission is to keep New Yorkers safe. “We give scrupulous, fair, and timely review to every application for construction work,” said Andrew Rudansky, a department spokesperson.

Owners of the Mayflower Business Group and the architects on a midtown hotel they’re trying to build also wrote four $5,000 checks for a total $20,000 Fairness PAC donation in September. At the time, they were trying to get Buildings Department approval of the hotel’s construction permits.

On Sept. 12, the DOB rejected plans to shore up a bracing system at the site, issuing a “job on hold” declaration. Seven days later Mayflower wrote checks to Fairness PAC. On April 5, the department approved the plan.

Owners Weihong Hu and Xiadzhung Ge could not be reached for comment.

A Stop-Work Order is Lifted

In November, Fairness PAC received three $5,000 checks totaling $15,000, two from individuals who identified themselves to the PAC as managers of Jenel Management and a third from a woman with the same last name. At the time, Jenel was getting repeat visits by building inspectors at a 43-story luxury apartment and office building the company was building in downtown Brooklyn.

Four times between January 2018 and August 2018, the Buildings Department shut down the site due to code violations. Each time they let it reopen soon after. After the checks went to Fairness PAC that November, the department issued one more stop-work order, and rescinded it a few weeks later.

The Jenel donations reveal the limitations of the mayor’s system of vetting donors solely by running names through the official database of entities doing business with the city.

The Jenel donations came from managers and an individual who appears to be related: All have the last name Dushey. Their full names do not appear in the city’s doing-business database, but several other Dusheys are listed as working for 540 Fulton Associates LLC, records show.

A search of New York’s Department of State Division of Corporations records shows that 540 Fulton Associates LLC was registered in March 2013 “c/o Jenel Management Corp.”

Jenel executives were on vacation this week, according to a receptionist at the firm, and an email message to Jenel Management CEO David Dushey was not returned.

Asked about the cases cited by THE CITY, Casca said categorizing entities as having business pending before the city was a broad concept that could even include homeowners who appeal their property tax bill.

“A PAC is permitted by law to accept contributions from people in the Doing Business database,” he said. “A PAC is permitted by law to accept contributions from city lobbyists. A New York state PAC is allowed to accept contributions of any size. The Mayor has voluntarily set out a strict standard for what kind of contributions Fairness PAC will accept, including refusing donations from people in the Doing Business database, which is a higher standard than any elected official in New York is required to follow.”

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