Monday, September 17, 2012

The Culture of Cheating: Forest City's effort, through Kruger, to get taxpayer money to rebuild the Carlton Avenue Bridge

Remember how a Forest City Ratner executive, asked in July 2009 if the would seek more subsidies, responded, “Forest City does not expect to ask for more subsidy?" Not only did Executive VP later request $10 million more in housing subsidies, so too did Executive VP Bruce Bender try to get state funds to repair the Carlton Avenue Bridge the developer was supposed to fund.

The corruption charges that surfaced in March 2011 against then-state Senator (and now-imprisoned) Carl Kruger portrayed a chummy relationship between Kruger and Bender, who not only tried to get money for the bride but also for the Lakeside Center project in Prospect Park. (Bender's wife is on the Board of Directors of the Prospect Park Alliance.)

Though the conversation between Kruger and Bender occurred in December 2010, the charges cast in new light some of Kruger's over-the-top support for Atlantic Yards, including his Brooklyn aria at an August 2006 environmental review hearing and his accusation in May 2009 of Metropolitan Transportation Authority intransigence regarding a renegotiation of the Vanderbilt Yard deal.

And they showed Forest City's relentless--if, in this case, unsuccessful--push to offload its obligations on the public. That's savvy business, but its closer to the "culture of cheating" than to "civic developer" status that Bruce Ratner professes.

Kruger, who got bribe money funneled through lobbyist Richard Lipsky (who had FCR among his clients, though there was no evidence he acted on FCR's behalf), was willing to help Bender on some requests, but not the $9 million Bender wanted for the repair and reconstruction of the Carlton Avenue Bridge.

The bridge, which went out of service in January 2008 supposedly for two years, was instead expected to reopen in "summer 2012" and now will open around Sept. 24, which, technically, is the third day of autumn.

Dealmaking on wiretap

As stated in the complaint (below), intercepted phone calls reveal conversations Kruger had beginning 12/28/10 with Bender, Forest City's "Vice President of Governmental Affairs and Public Relations."
Kruger and his chief of staff discussed three real estate projects for which Bender had requested state funding, including a project at Mill Basin ($2 million), "Lakeside" (the Prospect Park renovation, for $4 million), and the Carlton Avenue Bridge ($9 million).

The city is paying $24 million of the $40 million bridge reconstruction costs; Forest City, according to an Empire State Development Corporation document, was supposed to pay the remaining $16 million on its own.

According to the document, Kruger learned that "Senate Leader #1" had indicated there was only $4 million. "The Vice President said he needed a 'combo of two projects... the park and Carlton Avenue Bridge." Kruger said "the bridge is out," and asked Bender to choose:
The Vice President said that he did not know and that "this" was "bad." KRUGER said, "I guess the park, fuck the bridge." The Vice President said that "my dilemma is as you know, I don't mind fucking the bridge, I can't fuck it right now, I've got to leverage that bridge, what's my value?"
(It's unclear exactly what Bender meant here by "fucking the bridge," but perhaps neighbors wondering when it would re-open already had an inkling.)

Kruger said he was only the middleman; Bender asked Kruger, as chair of the Finance Committee, to get more money from Senate Leader #1. Kruger apparently backed away, saying he could direct money to community organizations:
The Vice President said, "Carl, I love you, but this is what I used to do and I know...." KRUGER said that he had a call into the Senate Staff Member and that Kruger would call the Vice President back later.
Kruger later talked to a Senate Staff Member, learning that an additional $500,000 was available:
Kruger reiterated that the Senate Staff Member should allocate $500,000 to the Vice President's "Prospect Park" project."
Letting it go

When Kruger reported back to Bender that the park project would be funded, Bender said "You're cute. You're good. You're good Carl," but complained it still wasn't enough. Then, according to the document:
Kruger and the Vice President discussed the major real estate project in Brooklyn, affordable housing and parking issues. The Vice President talked about getting more money. KRUGER said that the Prospect Park project would get funded, but not "anything to do to build bridges... let [Real Estate Developer #1's CEO] build his bridges." The Vice President laughed again and said, "I love you. I really do actually." KRUGER said, "I really don't know anything about this stuff. I told him, 'whatever.'... The couple of bucks that I had, I don't know what the hell to do with it anyway. Take it. Come Monday, I won't have it. So take it and enjoy it."
That was apparently a reference to the fact that the Republicans were about to become the Senate Majority in 2011 and Kruger would lose his influence.

When Kruger resigned and pled guilty 12/20/11, it apparently included admitting that he helped deliver state funds to a cause championed by Bender. Lipsky, who later pleaded guilty without mentioning the Forest City connection. He awaits sentencing.

Click on graphics to enlarge




kruger-carl-et-al-complaint

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