We each have a favorite charity, one that reflects the causes or beliefs most dear to us. But politicians have come up with all sorts of off-label uses for nonprofit groups. They can be used to gussy up a thin résumé, as a machine for gaining and maintaining political power, or even as a source of funds when personal bank accounts run low.If you happen to be the Speaker of the City Council, shadow nonprofits can also be a great instrument to stow away millions of dollars for later distribution to favored groups.
The list of local politicians who have gone to prison because they looted or exploited nonprofit groups (a.k.a. “community based organizations”) is only a subset of New York’s roster of corrupt officials. Larry Seabrook, Miguel Martinez, Hiram Monserrate, Shirley Huntley, Pedro Espada (père et fils) … and that’s just off the top of my head. The aforementioned list also doesn’t include the many relatives and staff members of electeds who were involved in shady nonprofits, who may have taken a tumble in their boss’s stead.
In this first City Council Watch column for City & State, we examine some of the relationships between nonprofits and the New York City Council members and candidates whose political fortunes are entwined with them.
Bronx Councilwoman Maria del Carmen Arroyo has a long tangled history with the South Bronx Community Corporation, which her mother, Carmen Arroyo, ran, started in 1978. Over the years the SBCC received millions of dollars in grants to provide social services, and later became a developer of housing units for elderly and lower-income people using federal housing grants. It also became a base of operations and a source of local power for the Arroyo family: Carmen Arroyo was elected to the Assembly in 1994, and Maria del Carmen Arroyo, who under her married name, Maria Aguirre, took over the directorship of the organization from her mother, was elected to the Council in 2005. Oddly, the councilwoman cites her time as executive director of SBCC as a “volunteer” position on her official Council Web page, though IRS documents clearly show she was salaried.
Keeping the nonprofit in the family, Carmen Arroyo’s grandson Richard Izquierdo took over the SBCC as president and ended up draining more than $100,000 from its coffers, spending the money on lavish dinners, clothes and plane tickets for his councilwoman aunt and assemblywoman grandmother. He and SBCC Executive Director Margarita Villegas, a friend and campaign treasurer for del Carmen Arroyo, subsequently pleaded guilty to embezzlement charges and went to prison in 2010. Izquierdo’s elected relatives managed to avoid prosecution.
After his release from prison, Izquierdo was hired by another Bronx nonprofit, the Neighborhood Association for Inter-Cultural Affairs, headed by longtime family associate Eduardo LaGuerre, to which Councilwoman Arroyo had previously tried, albeit unsuccessfully, to steer a juicy housing contract.
In April 2013, 15 employees of the Puerto Rican Family Institute, which receives discretionary funding from Arroyo, made small contributions to her. Two PRFI employees independently confirmed to this columnist that they made these contributions at a “lunch meeting” at their Bronx office. One of them believed that Arroyo had been at the meeting; the other one wasn’t sure. By law, campaign fundraising cannot take place at nonprofits receiving city funding, and no intermediaries have filed on the councilwoman’s behalf.
Right after Councilman Ruben Wills of Queens won his seat in a 2010 special election, he found himself in trouble regarding some outstanding warrants, including one for child support arrears and another for petty larceny. Well, we all have a past. In Wills’ case, his past also includes a nonprofit group called New York 4 Life, which received a $33,000 grant from now-indicted state Sen. Shirley Huntley, for whom Wills formerly worked as chief of staff.
New York 4 Life, which Wills proudly touts in his official Council bio as part of his professional history, has never filed any tax forms or registered for nonprofit status. No one besides Councilman Wills appears to have worked for or with the organization, and no one can claim to have been helped by it—or harmed, for that matter—since it appears that the organization has never done anything beyond existing on paper. Wills has not been able to account for what happened to the $33,000 New York 4 Life received from the state, and has pleaded the Fifth on the subject when queried about it by the Attorney General’s office.
Jenifer Rajkumar, who is running to unseat Margaret Chin in City Council District 1, was embarrassed earlier this year when it came out that W-Spin, the nonprofit she founded to promote Third World girl power and heralded as one of her major accomplishments, had never done anything—ever. But Rajkumar’s deception is small potatoes compared with the master of this kind of bamboozlement, Reshma Saujani, a candidate for public advocate, the ex-officio president of the Council.
Saujani, coming off a disastrous and expensive challenge to Rep. Carolyn Maloney in 2010, badly needed to retool her image. A securities lawyer active in Democratic fundraising circles, Saujani apparently thought it wise as a congressional candidate targeting an Upper East Side electorate to play up her work for “three hedge funds.” What she did not emphasize on the campaign trail was that her employers included notorious financier (and Democratic fundraiser) Hassan Nemazee, now serving 12 years at Otisville for trying to steal $70 million from Citigroup; Blue Wave Partners, a subsidiary of the Bushconnected Carlyle Group; and the Fortress Investment Group, which invested in the subprime mortgages of and foreclosed on people whose homes were damaged by Hurricane Katrina.
Of course, one needs to eat, but as Saujani learned on Election Day when she received a mere 19 percent of the vote against Maloney despite spending $1.3 million, a Wall Street-heavy bio like hers doesn’t tend to enthrall progressive Democratic voters in New York City. So Saujani got busy decorating her story to prepare for her next campaign. She took a sub-six-figure job working for Bill de Blasio as deputy public advocate for a whole 14 months; and then, after leaving the office, launched her own nonprofit group, Girls Who Code, in the spring of 2012.
Girls Who Code now takes top billing on Saujani’s public profile. It is hard to find mention of her having done anything else. The organization, which states as its mission “to achieve gender parity in computing fields,” has received a staggering amount of press, including multiple stories in The New York Times, coverage in The Wall Street Journal, Time, Forbes and Glamour. It has also amassed sponsorships from Goldman Sachs, Google, GE, AT&T, Twitter, Capital One and eBay, among others. As Saujani puts it, “This is more than just a program. It’s a movement.”
Given the amount of attention Girls Who Code has received, one might be surprised to discover that, until two weeks ago, virtually the entire extent of Girls Who Code’s work was a single 8-week computer day camp for 20 teenage girls last summer. This summer Girls Who Code is holding another 8-week computer day camp for 160 girls at 8 different locations. While certainly this program seems admirable, the actual scope of Girls Who Code falls short of what one generally expects of a major social movement.
It is odd that Girls Who Code, while not shy about promoting itself, makes it hard to actually get in touch with anyone at the organization. The nonprofit does not have its own offices: The group borrows space from AppNexus, a company owned by Saujani’s husband’s business partner. Moreover, its website does not list a phone number to contact it, or even an email address. Directory assistance says there is no listing for Girls Who Code in New York, though this columnist did get a number by appearing in person at AppNexus’ front desk and asking for one. Apparently Girls Who Code has paid to keep its number private.
Saujani, whose tech-entrepreneur husband afforded her entrée to the rarefied world of the tech billionaire class, has no tech background herself. So what inspired her to found Girls Who Code 18 months before an election in which she knew she would be running? We cannot confirm motive, of course. Girls Who Code hit the ground with a million dollars in seed money, according to IRS documents. Some might suggest such an effusion of publicity around a relatively slight endeavor was chiefly one thing: a stroke of self-promotional genius.
Tags: Carmen Arroyo, Carolyn Maloney, Eduardo LaGuerre, Girls Who Code, Hassan Nemazee, Hiram Monserrate, Jenifer Rajkumar, larry-seabrook, Margaret Chin, Margarita Villegas, Maria del Carmen Arroyo, Marria Aguirre, miguel-martinez, new-york-4-life, nonprofit, Pedro Espada, reshma-saujani, Richard Izquierdo, Ruben Wills, shirley huntley