Large real estate donations find their way into both ends of New York City Council speaker race

Councilmember Corey Johnson raised over $505,000 for his committee to reëlect, the second-largest amount of money amongst Council speaker candidates during the 2017 Municipal election cycle. Like all of the Council speaker candidates, Councilmember Johnson had no dedicated campaign committee for the Council speaker race, meaning fundraising or expenditures, if any, passed through his committee to reëlect. Four years ago, guidance given by the New York City Campaign Finance Board to then Councilmember Melissa Mark-Viverito (D-Spanish Harlem) indicated that it was prohibited to use fundraising from a committee to reëlect for purposes related to a Council speaker race. Source : @CestVraiApp

Councilmember Corey Johnson raised over $505,000 for his committee to reëlect, the second-largest amount of money amongst Council speaker candidates during the 2017 Municipal election cycle. Like all of the Council speaker candidates, Councilmember Johnson had no dedicated campaign committee for the Council speaker race, meaning fundraising or expenditures, if any, passed through his committee to reëlect. Four years ago, guidance given by the New York City Campaign Finance Board to then Councilmember Melissa Mark-Viverito (D-Spanish Harlem) indicated that it was prohibited to use fundraising from a committee to reëlect for purposes related to a Council speaker race. Source : @CestVraiApp

By LOUIS FLORES

Large real estate donations have infiltrated both ends of the race for the New York City Council speaker race, which was recently concluded, if press reports are to believed, after U.S. Rep. Joseph Crowley (D-Queens) announced that he had selected Councilmember Corey Johnson (D-Chelsea) as the next City Council speaker. Reports of U.S. Rep. Crowley's selection of Councilmember Johnson as the next Council speaker were published last week by The New York Times, the cable news network NY1, and other news outlets.

Research and analysis from various sources reveals that real estate industry officials have been omnipresent in Councilmember Johnson's parallel political campaigns this year -- his campaign for reëlection and the speakership race. Councilmember Johnson has received large donations from individuals employed by or the beneficial owners of real estate development companies, and their lobbyists, and similarly-origined campaign donations have been given to U.S. Rep. Crowely's political committees. Other possible influence exerted by real estate industry officials may include private meetings had by Councilmember Johnson with real estate lobbyists and developers. Despite what some activists for Government reform have described as Councilmember Johnson's over-reliance on real estate donations, some civic leaders are expecting Councilmember Johnson to undertake new real estate regulations, including the offering of rent protections to small businesses facing escalating rents upon lease renewals. If Councilmember Johnson does not deliver on new regulations or reforms to benefit the public, then he may end up proving that the influence of real estate donations have deprived the public of its intangible right to the honest workings of New York City Government, some activists have informed Progress Queens.

To some extent, all of the eight Council speaker candidates have demonstrated some conflicts of interest over the sources of their large donations, or possible conflicts of interests with their campaign consulting firms, some of which double as lobbying firms, including on behalf of the real estate industry. Until the announcement made by U.S. Rep. Crowley of Councilmember Johnson's selection to be the presumed, next Council speaker, Councilmember Johnson had been reportedly facing a chief rival for the leadership post, Councilmember Robert E. Cornegy, Jr. (D-Crown Heights). Under Council Speaker Melissa Mark-Viverito (D-Spanish Harlem), Councilmember Cornegy has blocked any hearing or vote on proposed legislation that would offer small businesses some rent protections, a sign of influence of the real estate industry, according to some advocates for rent reform laws.

Marni Halasa, a former City Council candidate, who challenged Councilmember Johnson in the recent November general election, is advocating for a measured approach to hold the next Council speaker accountable to the issues important to New Yorkers. "While Robert Cornegy isn't a good choice, because his record shows that he hasn't done anything for small businesses, we have to see whether Corey Johnson makes good on his promise to bring the Small Business Jobs Survival Act to a hearing. History has shown us that the last two Council speakers have not done so." The proposed small business legislation would give substantial rent protections to small businesses, with renewal rights and the right to negotiate fair terms, but it faces stiff opposition from the Real Estate Board of New York City, an industry lobbying group, which views any democratic regulation of real estate or land use as an unconstitutional taking of private property rights. Ms. Halasa was featured in a picture for an article published by The Villager, in which advocates for the small business rent regulation bill were critical of the Councilmember Cornegy. Ms. Halasa said it was somewhat misleading for her to be portrayed as soley being opposed to the speakership candidacy of Councilmember Cornegy, whereas the truth was she has been critical of many of the Council speaker candidates, largely based on the out-sized role of money in their political committees. 

Ms. Halasa, a former Occupy Wall Street activist, said she was cautious but fair about Councilmember Johnson promises to support small businesses. "It's wonderful that Corey Johnson said he supports small businesses. It's a new year, and I'm really hopeful. But just because you have the rhetoric, it doesn't mean you will do anything about it. We have to hold the Democrats' feet to the fire," she said. During her City Council campaign, Ms. Halasa's campaign team published research and analysis, showing that Councilmember Johnson has been highly conflicted by the large amounts of campaign contributions he received from big business interests, the real estate industry, in particular.  "An analysis of my opponent’s campaign contributions shows that 70% of all of his campaign contributions were donations of $1,000 or more. Of those large donations, 68% came from individuals with ties to real estate, Wall Street, nightlife, and corporate philanthropy," according to one post on the Halasa campaign-backed Web site. Amongst the supporters from whom Councilmember Johnson's committee to reëlect accepted donations included members of the Rudin family, who profited from the controversial luxury condominium conversion of the former campus of the shuttered St. Vincent's Hospital. Ms. Halasa's campaign team included the publisher of Progress Queens.

One of the intermediaries, who was responsible for bundling campaign donations for Councilmember Johnson's committee to reëlect, was Jay Kriegel, a lobbyist for The Related Companies, a large real estate development firm. Mr. Kriegel bundled $6,750 for Corey 2017, Councilmember Johnson's committee to reëlect, according to Municipal campaign finance regulatory authority records. Information published online by OpenSecrets.org, a transparency Web site backed by the Center for Responsive Politics, showed that the real estate industry was the largest private business sector to donate to U.S. Rep. Crowley's committee to reëlect in the 2016 election cycle, serving as the source of donations in excess of $340,000, and that The Related Companies was the largest source of donations to U.S. Rep. Crowley's political action committee, the Jobs Opportunity and Education Political Action Committee, or JOE-PAC. Sources for other large donations to JOE-PAC included a division of Wall Street bank Credit Suisse and the National Association of Real Estate Investment Trusts.

Johnson met privately with lobbyists, including one, who would become his largest bundler

Nearly two years ago, Progress Queens published a report based on documents obtained under the State's Freedom of Information Law that had been requested by Government reform activist Michael Petrelis. The records showed that Councilmember Johnson had been having private meetings with lobbyists and developers. The records that were obtained represented Councilmember Johnson’s partial 2015 Calendar. For example, Councilmember Johnson met with Ethan Geto on August 12 ; with Brad Gerstman of Gotham Government Relations on August 25 ; with George Arzt on September 22 ; with officials from the Jewish Community Relations Council at the Israeli Consulate on October 21 ; and with Gary LaBarbera, the political operative from the Building and Construction Trades Council of Greater New York, a leader of the recent negotiation efforts to renew the scandal-ridden 421-a tax abatement program that had become the subject of several political and campaign corruption scandals. In the past, Mr. Geto’s lobbying firm has represented Forest City Ratner, developer of Atlantic Yards in Brooklyn, and Toll Brothers. Mr. Geto was also the largest campaign contribution bundler to Councilmember Johnson's committee to reëlect, having served as the reported intermediary for donations in excess of $22,000, according to online records of the Municipal campaign finance regulatory authority.

As reported by Progress Queens and other media outlets, Mr. Arzt has acted as a lobbyist on behalf of the controversial real estate developer Extell Development Company. Councilmember Johnson’s partial 2015 calendar also showed meetings with real estate developers, including Douglas Durst at Mr. Durst’s office building. The meeting with Mr. Durst took place an hour after Councilmember Johnson had concluded a prior meeting with officials from the Partnership for New York City, records showed.

As Council speaker, Johnson will have a large role in regulating the real estate industry

Were Councilmember Johnson to become the next Council speaker, he would be able to exert discretion over applications to approve large rezoning and construction projects under the Uniform Land Use Review Procedure, or the ULRUP Process. As Council speaker, Councilmember Johnson would also have discretion to oppose real estate regulatory legislation opposed by the real estate industry and their lobbyists. At their sole discretion, City Council speakers can keep bills, like the small business rent protections bill, from ever receiving a public hearing or coming up for a vote. Having power, authority, and discretion over ULURP Process applications, regulations, and legislation makes Councilmember Johnson of keen interest to real estate developers and their lobbyists.

Other senior Government officials, who have received large campaign donations from real estate developers and who have then have acted with the appearance to benefit the real estate industry, have come under the scrutiny of Federal investigators. Mayor Bill de Blasio (D-New York), who backed Councilmember Johnson's speakership campaign following reports that U.S. Rep. Crowley selected Councilmember Johnson to become the next Council speaker, escaped charges after his administration was the reported target of a wide-ranging, Federal corruption investigation into his campaign finance activities, also reported to have involved officials from the real estate industry.

When Federal prosecutors investigated and later eventually charged former New York State Senate Majority Leader Dean Skelos (R-Rockville Centre) with corruption charges, an unindicted co-conspirator in the Government's case was later revealed to be a very wealthy real estate developer, who made out-sized campaign contributions to the political committees of various elected officials. In the corruption trial against former New York State Assembly Speaker Sheldon Silver (D-Lower East Side), the role of large campaign contributions raised suspicions of law enforcement agencies that elected officials were accepting the large campaign contributions and then bestowing official acts that were beneficial to the real estate industry. In the Sealed Complaint that led to the arrest of former Assembly Speaker Silver, for example, the U.S. Department of Justice noted former Assembly Speaker Silver's power and authority to regulate and approve Governmental actions that created significant financial value to certain participants in the real estate industry.

The office of the U.S. Attorney's Office headquartered in Brooklyn, which has jurisdiction over Queens, declined to answer advance questions submitted by Progress Queens. As reported by Progress Queens, Government reform activists have expressed concern that, whilst former Brooklyn U.S. Attorney Robert Capers launched a probe of political and campaign corruption leading to arrests in Nassau County, on Long Island, activists have questioned whether Acting U.S. Attorney Bridget Rohde would launch a similar institutional probe of Queens politics, including into the Council speaker race.

Postscript

After the publication of this report, the lobbyist Mr. Gerstman posted the following response on a social media network, defending his relationship with Councilmember Johnson.