By: Gary Tilzer
President Eisenhower as he was leaving office warned America to beware of the military–industrial complex, which he described as the relationship between a country’s military and the defense industry, lobbyists working together as a vested-interest which influences public policy. During the de Blasio administration the city’s nonprofits were paid between 6 to 10 billion to house the homeless, many suffering from mental illness, operated as political warlords, empowered by lobbyists, and elected officials to obtain their funding.
The template or model for these new super nonprofits were developed by former Brooklyn Boss Vito Lopez who built the new age political machine in the 1990’s. The Lopez nonprofit, the Ridgewood Bushwick Senior Citizens Council, employed 1,400 people, obtained more than fifty grants budgeted at more than $33 million annually. The crucial difference between Lopez’s super nonprofits and todays, is that the former boss was responsible for poor services. Today it is still politics putting mega nonprofits together, but the individual elected officials, lobbyists are not held responsible for their poor service, nobody is.
Several homeless nonprofits have been paid by the city for years, despite providing poor services, ignoring contracted responsibilities and operating corruptly. They were allowed to operate recklessly, abusing the homeless and those hurt by them, for years because the media, city and state auditors, DAs, and City Hall ignored how poorly they were operating and how corrupt they were.
Even When the Media Exposed Corruption, Poor Services in the Nonprofits City Hall Did Not Improve the Oversight in Fact They Increased Their Funding
The city learned nothing since the mid-2010s, when it paid a nonprofit in the Bronx more than $10 million to house, feed and provide social services to families at a 100-room homeless shelter. According to the nonprofit’s executive director, Ethel Denise Perry, here is where much of the money went: Her gym membership. Her car payments. Shopping sprees at Bergdorf Goodman, Bloomingdale’s, Ferragamo, Neiman Marcus, Manolo Blahnik, Tiffany’s, and other luxury retailers. Her brother and nephew, whom she put on the payroll of the nonprofit, Millennium Care.
The city’s homeless emergency gave de Blasio cover to give out contract nonprofits without proper bidding. The lobbyist companies working for the nonprofits in many cases are the same campaign consultants that help elect the comptrollers, DAs, and elected officials in City Hall to office. Those elected officials that should be monitoring the homeless shelters nonprofits not only allowed them to operate poorly, corruptly, but continue but to expand. One analysis calculated that $4.6 billion in city funds over eight years had flowed to providers under legal scrutiny for shady practices.”
In the last two months, while the mayoralty was in transition, with the new mayor who prefers permanent housing to the homeless shelters, the city’s newspapers have begun to publish a flood of investigative stories exposing how the homeless nonprofits poor services run and corrupt. Some of them, even the de Blasio administration, shut down after they were exposed in the press.
Jack A. Brown III’s non-profit CORE kept scoring contracts — netting a total of $763 million in city contracts over the de Blasio administration’s eight years — until all at once The Post and The New York Times Daily News published investigations virtually simultaneously that exposed Brown’s web of for-profit companies and extraordinary compensation in the millions to himself.
The Daily News wrote and editorial, 12/26/21:
Daily News 12/26/21” The party’s over, NYC homeless services funding needs oversight, not just scrutiny after the fact”: “The city announced it was severing ties to the nonprofit homeless shelter provider CORE Services Group, putting an end to a saga set off by a New York Times investigation which found that CEO Jack Brown had paid himself in excess of $1 million a year, hired various relatives and funneled city cash to his own for-profit enterprises.”
Brown’s Non-Profit Even Helped Another Non-Profit Banned from Doing Business Until They Were Tripped Up by a Sheriff Accidentally
The scandal-scarred shelter operator BEDCO barred by outgoing Mayor from receiving city contracts after two children were killed by a leaking radiator at one of its sites came within a breath of receiving millions more in city funds right under the mayor’s nose, The Post has learned the $38.7m was hidden by BEDCO’s who arranged with CORE Services (whose city contracts were canceled recently) — to be paid for by taxpayers through DHS giving, Brown another opportunity to cash in, to operate and renovate a decrepit four-story shelter owned and formally operated by the Bushwick Economic Development Corporation on Chauncey Street in Brooklyn. Records show the deal only unraveled after the Sheriff’s Office seized the building from BEDCO as part of an ongoing legal dispute over unpaid debts — not a moral objection to doing business with the firm again via a proxy, officials acknowledged.
Theft or misappropriation of taxpayer funds is a matter of grave-concern, but particularly exasperating when every dollar pilfered by unscrupulous actors is a dollar not going towards providing services for one of the neediest populations in the city, or to protect New Yorkers from attacks on the subways and streets by the mental ill homeless.
NYC’s Reluctance to End Contracts with Notorious Non-Profits
The New York Times’ bombshell report about one of the city’s biggest homeless shelter providers points to its inability to hold shelter operators accountable for their troubling behavior- City and State
The NY Post reported early this year: The New York Times cited accusations by 10 women of sexual assault or unwanted attention from the $306,000-a-year head of the Bronx Parent Housing Network, Victor Rivera — along with reports that he’d used his position to enrich himself, his family and associates. Sorry: too little, too late. Rivera and BPHN have gotten more than a quarter of a billion in taxpayer cash since 2017 alone, the Times reported, and the city knew about financial- and sexual-abuse allegations long ago. Yet instead of ending the contract with BPHN, or even demanding Rivera’s resignation at the time, it merely slapped his wrist and skipped merrily along, until the NY Times wrote a story early this year.
NY Times 2/23/21 “In 2019, Amy Julia Harris, an investigative reporter for The New York Times’s Metro desk, received a tip about Victor Rivera, the head of the Bronx Parent Housing Network, one of the largest operators of homeless shelters in New York City. Earlier this month, she published her report, which revealed that Mr. Rivera had been accused of sexual assault and harassment and financial improprieties but had operated largely with impunity for years. Within hours, Mayor Bill de Blasio said he would hire an independent auditor to look into the city’s shelter system.” Daily News 3/25/21 “Former head of Bronx Parent Housing Network charged with bribery.”
Similarly, hotel-shelters run by Acacia Network Housing, which has raked in $1 billion-plus in contracts since 2010, have been cited for assorted hazards. The city admits ten of its seventy operators are on a watchlist. Lax oversight and de Blasio incompetence are only partly to blame: Court orders and generous eligibility rules have led to mushrooming demand for beds, but with a limited number of operators, the city says its “first objective” is to “resolve matters collaboratively” with operators. Translation: We close our eyes to problems, which run prominent political campaigns. Despite years of scandal, NYC nonprofits continue to profiteer – NY Post, 2/8/21.
Acacia is the largest provider of homeless housing in New York’s metropolitan area, but it is not just a shelter operator. Over the decades, Acacia has built a small empire with connections running up the ladder of city government. It has amassed a web of interconnected nonprofits and for-profits that offer shelter, affordable housing, addiction and medical services, and security. According to the city’s Department of Homeless Services website, Acacia manages “750 individual family units and four buildings for approximately 550 homeless adults.”
Acacia received $259 million in contracts from the Department of Homeless Services (DHS), which accounted for 18.5% of the department’s contracts that year. Acacia gets additional funding from the Department of Social Services and the Department of Housing Preservation and Development. Since the 2011 fiscal year, it has received over $1.1 billion worth of city contracts. This is not an isolated issue. In August, the New York Post reported that inspections of Acacia’s hotel shelters had revealed hazardous and unsanitary conditions including faulty wiring, broken carbon monoxide detectors, and damaged plumbing. As of Aug. 31, 2019, Acacia buildings had hundreds of open violations. A 2018 Master’s thesis by then-journalism student Ben Foldy found that conditions at buildings where Acacia manages all units worsened over time.
Acacia Has Political Muscle
Acacia paid one of the most powerful lobbyists in the city, the MirRam Group, $700,000. Twi$ted web of political nonprofits in Bx. – NY Post 8/26/2012. The nonprofit also paid former Bronx Councilwoman Maria del Carmen Arroyo $284,000-a-year as its vice president of administration after resigning from city government. Its $816,000-a-year CEO, Raul Russia, who was Mayor Rudy Giuliani’s probation commissioner and, later, chairman of the Local Conditional Release Commission. Acacia President Hector Diaz, who banked $311,000 in 2017, was once a city clerk.
Not Only is It Wrong to Keep Corrupt Poorly Run Non-Profits, the City Can No Longer Afford to Pay Billions
The city may face budget deficits of more than $5 billion each year for the next three years, according to estimates from the state comptroller’s office. de Blasio increased the city’s budget by 35% in eight years. Spending on homelessness more than doubled to $4 billion during the de Blasio Administration and de Blasio was “fortunate,” said Andrew Rein, president of the Citizens Budget Commission. “First, riding a really strong economy and second with what may have been the biggest bailout of a local government during a recession.” If tourism, office occupancy, and small business owners do not come back, the budget deficit will be much higher than $5 billion. Once federal money is exhausted, the city will be forced to cut teachers, police, and even homeless services. You know NYC is in real trouble when Starbucks in midtown Manhattan is closing because office workers are still working remotely.