Tuesday, August 03, 2010

Deputy Mayor Wolfson owns $5000 of Forest City Enterprises shares; does it matter? Nah

Does it make a difference that Deputy Mayor Howard Wolfson, who joined the Bloomberg administration in March, bought about $5000 worth of Forest City Enterprises (FCE) stock in 2007?

No, because 1) the administration was already behind the Atlantic Yards project promoted by FCE subsidiary Forest City Ratner and 2) the amount is too low to trigger action by the Conflicts of Interests Board (COIB).

Wolfson reported stock in the company, parent of Forest City Ratner, worth $5,000 to $39,999, but officials told the Post it was close to the minimum.

Unmentioned in the Post or AP reports is that $40,000 is the threshold for an "ownership interest" that, for someone in Wolfson's position, would require either divestment of that interest or disclosure to the COIB of that interest, subjecting him to the board's ruling.

AY opponents dismayed

The Post reported found some Atlantic Yards opponents dismayed:
"This project has never had any real oversight or accountability or full public transparency, so it shouldn’t come as a shock that a member of the Bloomberg administration has money invested in it," said Councilwoman Letitia James, whose district includes the 22-acre project footprint within Prospect Heights.

Daniel Goldstein, who founded an opposition group that held up the project in the courts for years, agreed.

The city is still doing business with the project’s developer," which could lead to potential conflicts for Wolfson, said Goldstein...

Dick Dadey, executive director of the government watchdog group Citizens Union, said "this is more of a perception problem than a conflict problem," adding Wolfson owns "too small" of a sum in Forest City Enterprises stock to think there’s a conflict or his judgement could be impaired.
I think it depends on whether Atlantic Yards is actually subject to critical city oversight. It's not. Mayor Mike Bloomberg got behind the project from the start, well before it was publicly announced.

As developer Bruce Ratner said at the groundbreaking in March, "And Mr. Mayor, in July 2003, I remember presenting this project to you. After listening, you said, 'Let's get this done.' Design reviews, transportation issues, infrastructure, housing programs, water, sewer, building department, DEP. Your agencies responded and you responded. You met that commitment."

So it's not like Wolfson's presumed enthusiasm for the project would be anything new.

Moreover, the Daily News reported:
"He doesn't have any responsibilities that affect Forest City," Bloomberg spokesman Stu Loeser said. "He's not an economic development person."
(By the way, it's curious that the Post put more journalistic resources into this story than a whole bunch of Atlantic Yards stories it's ignored.)

The COIB

Below are excerpts from the COIB document Ownership Interests: Relevant Sections of Chapter 68 and Board Rules

§2601. Definitions. As used in this chapter,
12. "Interest" means an ownership interest in a firm or a position with a firm.

16. "Ownership interest" means an interest in a firm held by a public servant, or the public servant's spouse, domestic partner, or unemancipated child, which exceeds five percent of the firm or an investment of twenty-five thousand dollars in cash or other form of commitment, whichever is less, or five percent or twenty-five thousand dollars of the firm's indebtedness, whichever is less, and any lesser interest in a firm when the public servant, or the public servant's spouse, domestic partner, or unemancipated child exercises managerial control or responsibility regarding any such firm, but shall not include interests held in any pension plan, deferred compensation plan or mutual fund, the investments of which are not controlled by the public servant, the public servant's spouse, domestic partner, or unemancipated child, or in any blind trust which holds or acquires an ownership interest. The amount of twenty-five thousand dollars specified herein shall be modified by the board pursuant to subdivision a of section twenty-six hundred three.

§2604. Prohibited interests and conduct. a. Prohibited interests in firms engaged in business dealings with the city.
Except as provided in paragraph three below,
(a) no public servant shall have an interest in a firm which such public servant knows is engaged in business dealings with the agency served by such public servant;

3. An individual who, prior to becoming a public servant, has an ownership interest which would be prohibited by paragraph one above; or a public servant who has an ownership interest and did not know of a business dealing which would cause the interest to be one prohibited by paragraph one above, but has subsequently gained knowledge of such business dealing; or a public servant who holds an ownership interest which, subsequent to the public servant's acquisition of the interest, enters into a business dealing which would cause the ownership interest to be one prohibited by paragraph one above; or a public servant who, by operation of law, obtains an ownership interest which would be prohibited by paragraph one above shall, prior to becoming a public servant or, if already a public servant, within ten days of knowing of the business dealing, either:
(a) divest the ownership interest; or
(b) disclose to the board such ownership interest and comply with its order.

§1-11 Adjustment of Dollar Amount in Definition of "Ownership Interest.”
Effective as of January 1, 2006, the dollar amount in the definition of “Ownership Interest” in subdivision (16) of § 2601 of the New York City Charter shall be adjusted from $35,000 to $40,000.

1 comment:

  1. doesn't matter that a Bloomberg top official is an investor with company doing business with the city? of course it matters. So it doesn't rise to a conflict in the eyes of Bloomberg or the COIC, but it still matters. Whether or not it impacts AY, it still matters. It's wrong.

    But the favoritism granted Ratner, by the City and Bloomberg admin, didn't require a piddling investment by Hillary's former communications director to exist, as you write. The vested interests, and favoritism already existed long before Wolfson hit the scene.

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