Sunday, January 17, 2010

A letter to the New York Times about its misleading coverage of Forest City Ratner and the Ridge Hill indictments

This is a letter sent to the New York Times.

I write to request a correction and/or Editor's Note regarding the Times's 1/7/10 coverage of indictments in Yonkers, headlined (online) Ex-Official in Yonkers Faces Charges of Corruption.

In three instances, the article contained lapses that add up to a more positive portrayal of developer Forest City Ratner than merited by the facts.

From the article

The Times reported, in part:
The former councilwoman, Sandy Annabi, 39, a Democrat whose term ended in December, was one of three people charged in the indictment. The other two, Zehy Jereis, 38, the former chairman of the Yonkers Republican Committee, and a lawyer, Anthony Mangone, 36, are accused of bilking two developers of tens of thousands of dollars and funneling the money and other favors to Ms. Annabi in return for her support.

...The investigation began in 2008, about two years after Ms. Annabi voted to enable a $630 million residential and commercial project by Forest City Ratner known as Ridge Hill, to move forward. Shortly after Ms. Annabi cast her vote, Forest City hired Mr. Jereis as a consultant at $60,000 a year.

The indictment does not name Forest City or the other developer, Franco Milio, who had proposed converting two vacant schools into market-rate housing in a development called Longfellow.

In a statement, Forest City said it had “cooperated fully with the U.S. attorney’s office during the course of its investigation and will continue to do so. In addition, Forest City has been advised by the U.S. attorney’s office that neither the company nor any of its employees is a target of the investigation.”
Not a target?

While it was certainly appropriate for the Times to quote Forest City's response about it not being a target of the investigation, the Times did not confirm with the U.S. attorney's office Forest City's claim. In fact, when I contacted the U.S. attorney's office the day the news broke, a representative would neither confirm the claim nor offer any comment.

And, as the Journal-News reported via its LoHud.com site, U.S. Attorney Preet Bharara "declined to comment on whether Forest City Ratner had broken the law by hiring Jereis or whether they were a target of the continuing investigation."

In other words, the situation is far more ambiguous than Forest City Ratner's claim suggests.

"Accused of bilking two developers"?

It is misleading shortand to claim that Jereis and Mangone "are accused of bilking two developers," later identified as Forest City Ratner and Franco Milio.

The U.S. Attorney's press release does subsume two cases in one description:
The Indictment also charges ZEHY JEREIS, the former head of the Yonkers Republican Party, and ANTHONY MANGONE, a Westchester County attorney, with conspiracy, bribery, and extortion in connection with two real estate development projects within the City of Yonkers which were pending before ANNABI.
But in neither case is alleged fraud--the common definition of "bilk," as used regularly in the Times (as noted by Michael D.D. White in his Noticing New York blog).

The official indictment tells a story that doesn't come close to deserving the term "bilk." As described in paragraphs 27 through 42 and particularly 35 through 42:
  • Annabi rejected efforts by "Developer No.2" (Forest City Ratner, or FCR) to change her vote
  • Jereis told FCR he could arrange a meeting with her
  • Jereis organized that meeting and, at the same time, asked FCR for a consulting job
  • Annabi reversed her opposition to Ridge Hill
  • Annabi issued a press release drafted by Jereis and FCR representatives
  • FCR agreed to give Jereis a job after Annabi voted
  • Jereis was hired by FCR as a "real estate consultant" on a monthly contract despite his lack of qualification
  • the contract was backdated, presumably at the agreement of both parties
  • Jereis submitted monthly reports purporting to describe the work he'd done, as required by his contract, only after the investigation was announced.
While Jereis may have filed misleading reports, the sequence as a whole suggests that Forest City Ratner cooperated in the scheme and, as White suggests, the people of Yonkers were bilked. FCR more likely got value for money.

Forest City Ratner is a sophisticated firm. It has the capacity to investigate the qualifications of its real estate consultants. It has a pattern of spending significant sums on lobbyists and on campaign contributions, so the hiring of Jereis might more likely be seen as part of the cost of doing business.

Similarly, as the Times reported 3/21/05:
Tax documents show that in 2003, [former Yonkers Mayor John R.] Spencer's [20-something-year-old] brother-in-law, Chris Spring, had a $100,000-a-year job with the [Ridge Hill Development] corporation, but a storm of protest followed and by 2004 he was on the developer's [FCR's] payroll instead.
Failure to disclose business relationship

In a 5/5/08 article on the Ridge Hill investigation, the Times offered a disclosure: that Forest City Ratner "partnered with The New York Times to build its new headquarters."

In this most recent article there was no such disclosure, though the articles are of similar import. Such disclosure would alert reporters and editors of the need to be exacting in their coverage of Forest City Ratner, and it also would alert readers to look at such coverage carefully.

In June 2005, then Public Editor Byron Calame wrote, in regard to an interview with Bruce Ratner:
The New York Times, I believe, has an obligation to alert readers when they are reading substantive articles about a company or individual with whom the newspaper has some business or professional relationship.
This article certainly qualifies. In fact, such disclosure might have prompted those working on the article to avoid the serious lapses detailed above.

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