special report

Mayor de Blasio Owes Unpaid Legal Bill to Firm Lobbying His Office

Mayor Bill de Blasio and First Lady Chirlane McCray speak to reporters on May 16, 2019.
Mayor Bill de Blasio and First Lady Chirlane McCray speak to reporters on May 16, 2019. Photo: Ben Fractenberg/THE CITY

A law firm Mayor Bill de Blasio owes more than $300,000 in unpaid legal bills to has targeted the mayor’s office — and even the mayor himself — to lobby for clients that include Disney, an examination by THE CITY found.

Kramer Levin Naftalis & Frankel was retained by de Blasio in 2016 to handle investigations of his fundraising tactics. He ran up about $3 million in legal bills before the U.S. Attorney and the Manhattan District Attorney finished separate probes.

Prosecutors decided not to charge the mayor with any crimes, although both offices found ethical issues with his activity.

Taxpayers already have footed most of the mayor’s legal bills. But de Blasio still owes Kramer Levin more than $300,000 for its defense of what he calls his non-city-related activity investigated by the prosecutors — including his failed fundraising bid to flip the state Senate to Democrats in 2014.

Meanwhile, Kramer Levin — which also represents clients as a registered lobbyist — has pressed de Blasio’s administration on behalf of numerous clients, lobbyist records from 2016 through last month show.

THE CITY found that just in the last year, Kramer Levin listed in either city or state disclosure forms its intention to lobby the Office of the Mayor on behalf of seven clients — mostly developers seeking zoning changes or smooth sailing through the city’s bureaucracy, according to city records.

De Blasio’s unpaid Kramer Levin bills linger as the mayor begins his quest for the White House amid a history of ethical questions raised by his fundraising tactics. As THE CITY revealed last month, the city Department of Investigation determined the mayor violated the city ethics code by raising money for his now-defunct Campaign for One New York from entities seeking favors from City Hall.

Disney on the Move

THE CITY found that just in the last three months, Kramer Levin listed de Blasio himself as one of the firm’s intended lobbying targets on behalf of a high-profile client: the Walt Disney Co.

In July 2018, Disney announced it had signed a lease to redevelop five lots in Soho’s Hudson Square for its New York offices — including a new headquarters for ABC. Days later, the Greenwich Village Society for Historical Preservation wrote to the city Landmarks Preservation Commission asking that four of the lots be declared landmarks — a designation that likely would have killed Disney’s plans.

Walt Disney Co. is redeveloping several buildings in Hudson Square.
Walt Disney Co. is redeveloping several buildings in Hudson Square. Photo: Ben Fractenberg

That month, Disney hired Kramer Levin.

Kramer’s lobbyist disclosure forms, first filed in 2018, show the firm initially planned to target Sarah Carroll, at the time the Commission’s executive director. In September 2018, de Blasio appointed Carroll as chair of the landmarks agency.

In January and February 2019, Kramer Levin expanded its list of potential lobbying targets — adding the mayor, senior advisor Anusha Venkataraman and Kate McHale, the landmarks commission’s research director. All told, Kramer billed Disney $25,282 for its work on the project.

On March 28, McHale informed the Village group’s executive director, Andrew Berman, that the commission had looked into the matter and declined its request. The commission found the four buildings developed by Trinity Church in the 19th century and designed by famed architect Charles Coolidge did not “rise to the level” of landmark status.

Berman told THE CITY Thursday: “As always with the mayor, one has to wonder if this decision was based upon the merits or who the lobbyist was.”

Freddi Goldstein, a spokesperson for de Blasio, told THE CITY Wednesday that the mayor had no contact with Kramer Levin on the Disney matter.

She then repeated the mayor’s explanation that he doesn’t meet with third-party lobbyists such as Kramer Levin — even though he has met with so-called in-house lobbyists who work directly for the entities seeking favorable treatment from City Hall.

“This administration only weighs the facts when making decisions,” Goldstein said. “Nobody’s lawyers or lobbyists factor in that process.”

The Landmarks Preservation Commission did not respond to a list of questions about the Disney project from THE CITY. Kramer Levin also did not respond to a list of questions about Disney and the other clients for whom the firm listed the mayor’s office as an intended target. Disney did not respond to a call seeking comment.

Mayor’s Defense Fund Snagged

De Blasio initially promised to pay off the entire Kramer Levin legal bill by raising money through a legal defense fund.

But the city Conflicts of Interest Board found that donations would have to be limited to $50 per donor, since they would be considered gifts under city law. He then said he would “let” taxpayers pay for most of the firm’s defense of what he termed “city-related” activity.

That still left the mayor on the hook for $300,000 to $400,000 for Kramer Levin’s handling of his non-city activity — including campaign-related behavior the Manhattan DA found violated the spirit of campaign finance laws.

In January, de Blasio got the City Council to pass a law allowing him to create a legal defense fund that capped individual donations at $5,000 and prohibited contributions from corporations, individuals doing business with the city and limited liability corporations that mask their owners’ identities.

Since then, he hasn’t set up the fund. In April, de Blasio said he was still awaiting Conflicts of Interest Board rules governing the process.

But the new law says trusts can be established on an interim basis even before the conflict board’s rules are written. Once the legal defense fund is set up, the mayor will soon after have to begin disclosing who’s writing him checks.

A Tower Near the High Line

Kramer Levin listed the Office of the Mayor and Venkataraman as potential targets in city lobbyist disclosure forms filed last year with one other client. In five more cases, Kramer Levin listed the mayor’s office as a likely target for lobbying in disclosure forms filed with the state Joint Commission on Public Ethics (JCOPE).

One such client was Douglaston Development, a builder seeking rezoning for a big residential project near the High Line, which has drawn neighborhood opposition.

Douglaston, a major real estate player founded by Jeffrey Levine, was already a de Blasio supporter. The firm donated $25,000 to the mayor’s old nonprofit, Campaign for One New York, in 2015, records show.

Douglaston Development lobbied to rezone two lots at 11th Avenue between West 30th and West 29th Street.
Douglaston Development lobbied to rezone two lots at 11th Avenue between West 30th and West 29th Street. Photo: Ben Fractenberg/THE CITY

In 2017, Douglaston began its quest to rezone two lots between West 29th and West 30th streets on the far West Side for a proposed mixed-use project that included a 660-foot residential tower. The developer needed a zoning change from commercial to residential for the project to fly, so it was required to include some affordable apartments. Douglaston promised 25% of the 990 units would be affordable.

Starting in 2017, Douglaston hired Kramer Levin to lobby the city on this project. Throughout 2018, Kramer listed the mayor’s office and all City Planning commissioners — including three appointed by de Blasio — as potential lobbying targets. The developer paid Kramer $548,441 for its services, records show.

Kramer’s lobbyists soon confronted a road block: On March 7, 2018, Community Board Four and Manhattan Borough President Gale Brewer rejected the firm’s plan, demanding a lower tower, placement of affordable units throughout the building and the relocation of a FDNY Emergency Medical Service station from a cramped lot to within the Douglaston project.

A week later, a Kramer Levin attorney testified before the City Planning Commission, agreeing to incorporate the EMS station into the project but opposing the reduction in the tower’s height.

On May 7, 2018, the commission approved Douglaston’s project as is — including the 660-foot tower. Douglaston did not respond to a request for comment.

Goldstein said de Blasio was not involved in the planning commission’s handling of this project, and had no contact with Kramer Levin on the issue. The planning commission did not respond to questions about its decision.

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