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March 20, 2010
AY Report: ACORN Going Bankrupt, Liu's CBA Task Force
Atlantic Yards Report
Times says ACORN on the brink of bankruptcy, ignores Forest City Ratner bailout
Less than a month after news broke that ACORN's New York affiliate had re-established itself as New York Communities for Change (with many of the same staffers), the New York Times reports that Acorn on Brink of Bankruptcy, Officials Say.
Most of the blame goes to the heavily-edited "sting" videos, though no criminal wrongdoing was found on the part of ACORN staffers who gave advice to a self-described pimp and prostitute:
After the activists’ videos came to light and swiftly became fodder for 24-hour cable news coverage, private donations from foundations to Acorn all but evaporated and the federal government quickly distanced itself from the group.
...
But long before the activist videos delivered what may become the final blow, the organization was dogged for years by financial problems and accusations of fraud. In the summer of 2008, infighting erupted over embezzlement of Acorn funds by the brother of the organization’s founder.
Actually , the Times lightly treats the embezzlement by the brother of ACORN founder Wade Rathke, given that the "infighting erupted" because the embezzlement had been covered up for nearly a decade.
...
And the Times article today completely ignores the $1.5 million loan/gift bailout of the national organization by developer Forest City Ratner.
But if Forest City Ratner can't meet its mortgage payment on a property at MetroTech, it's not likely to support ACORN any more. In fact, if ACORN files for bankruptcy, it will get protection from its creditors, and won't be able to pay back the onerous--if delayed--18% interest rate on the loan component, $1 million.
ACORN has served its purpose for Forest City Ratner, so the investment was not imprudent. Still, we now have another clue to explain why ACORN head Bertha Lewis, often front-and-center at Atlantic Yards events, was not given a role at the podium during the March 11 groundbreaking.
Comptroller Liu establishes Task Force on Public Benefit Agreements (including CBAs)
Comptroller John Liu, who has previously criticized Community Benefits Agreements (CBAs), is moving forward, by establishing a Task Force on Public Benefit Agreements, which cites, among other things, the City Bar Association's recent report calling for reforms.
From the Comptroller's web site
The Task Force will develop recommendations on best practices and draft a framework for a more effective and equitable process to guide public subsidized economic development projects in the City of New York, including accountability and enforcement mechanisms that would apply when tax dollars, rezonings, and other public resources are used to facilitate private development.
The recommendations should be guided by the following principles: accountability, transparency, inclusiveness, consistency and fiscal responsibility.
Posted by steve at March 20, 2010 9:27 AM