In late 2006, as the Bloomberg administration girded for what promised to be a bruising rezoning fight over the Willets Point section of Queens, it enlisted the help of Claire Shulman, the former Queens borough president.
At a meeting in City Hall that December, Ms. Shulman and Daniel L. Doctoroff, then a deputy mayor, agreed to form a nonprofit group with city and private money. Its primary purpose, Ms. Shulman said, would be to lobby on behalf of the mayor’s plan to turn the long-neglected area near the New York Mets stadium into a thriving hub of shops, hotels, condominiums and a convention center.
The group, the Flushing Willets Point Corona Local Development Corporation, eventually received hundreds of thousands of dollars in public and private money, and spent much of it to help push through the plan through the City Council.
It hired the Parkside Group, one of the city’s best-known lobbying firms. It brought in the Glover Park Group, the powerful political consulting firm, to bolster its media campaign. And Ms. Shulman, as the organization’s president, made countless personal appeals, promising to meet with every member of the City Council as it prepared to vote on the plan last fall.
“That was the whole idea,” Ms. Shulman said in an interview. “The idea I had with Dan Doctoroff was that we would help the city do what the mayor wanted, to clear Willets Point and develop it in the best interest of the city, and that’s what we’ve been trying to do.” In other words, Ms. Shulman added, “We lobbied the city for the city.”
Local development corporations like Ms. Shulman’s have been around for decades. Ranging from tiny neighborhood groups to giant quasi-public agencies like the city’s Economic Development Corporation, these loosely regulated organizations are designed to encourage businesses and industry to invest in local areas.
But one thing they are not supposed to do is lobby.
State law says local development corporations are not permitted to “influence legislation by propaganda or otherwise.” Ms. Shulman’s group eventually reported spending $450,000, roughly half its total budget, on lobbying, city records show.
Half the group’s revenues came from the Economic Development Corporation, which is also barred from lobbying. The other half came from corporate sponsors, including the Mets organization, which has long eyed the property, and several developers and construction firms that are expected to vie for lucrative redevelopment contracts when the city puts out requests for proposals in coming months.
Last November, the City Council voted 42 to 2 in favor of the plan, which authorizes the city to use eminent domain to remove the various auto repair shops and salvage yards that occupy the 62-acre portion of Queens. A group of business owners is suing to stop the city.
“They knew what they were doing,” said Gerald Antonacci, the leader of Willets Point United and the president of Crown Container, one of the area’s more than 250 companies that will be required to move when construction begins. “This was all planned out. They knew she was hiring lobbyists. This wasn’t a mistake.”
The attorney general’s office is reviewing the complaint. In recent months, the office has been looking into lobbying by local development corporations, and has identified a “small but not insignificant set” of groups that appear to be improperly lobbying, said a person briefed on the attorney general’s initial review.
The administration of Mayor Michael R. Bloomberg says that it never encouraged Ms. Shulman to lobby and that the $450,000 it gave to the group was not used for that purpose.
“The city regularly partners with local organizations that promote growth and economic development,” said David Lombino, a spokesman for the Economic Development Corporation. In the case of Ms. Shulman’s group, he added, “we are funding a scope of work that includes public outreach, organizing community support and proposing and advocating for area improvements.”
Andrew Brent, a Bloomberg spokesman, pointed to a letter Mr. Doctoroff sent Ms. Shulman three weeks after their first meeting. It outlined the goals of her group, including conducting and leading “outreach, public relations and marketing efforts” to support the proposed redevelopment in Willets Point, but it never mentioned lobbying elected officials.
Mr. Doctoroff, who left the administration at the end of 2007 to run the mayor’s financial news and data company, Bloomberg L.P., did not respond to requests for comment made through the company and the mayor’s office.
Ms. Shulman, borough president from 1986 to 2001, provides a starkly different account. “We hired lobbyists from the time we began, because we were told it was something we were supposed to be doing,” she said.
Ms. Shulman, an 83-year-old veteran of Queens politics, seemed a natural ally for the city. After retiring from office, she remained well regarded in the community and continued to serve on various boards. And she had long had her sights on Willets Point.
As borough president in the early 1990s, Ms. Shulman rejected as shortsighted a city economic development study that said development would flourish on its own if the city provided sewers and basic services to the area.
Instead, she proposed her own plan, which included a pavilion for international trade.
But like various redevelopment plans dating back to the era of Robert Moses, who unsuccessfully sought to turn the area into a park and parking lot for the 1964 World’s Fair, her vision went unrealized.
Her lobbying for this latest plan became an issue this year when the city clerk’s office, which regulates lobbyists, fined her group a record $59,090 for failing to register her activities with its office. But the issue of whether the group should have been lobbying at all went unaddressed.
Even now, Ms. Shulman is not sure her group did anything wrong.
In its 2007 federal tax returns, the group claimed it had spent no money on lobbying. The group has hired a lawyer to help it comply with all laws and regulations.
The border between what is legally acceptable advocacy of a position and what is illegally trying to influence legislation is often blurry. But critics of the Bloomberg administration’s aggressive and varied development ambitions say these neighborhood groups are increasingly crossing the line.
In a recent example, the Coney Island Development Corporation, essentially a subsidiary of the Economic Development Corporation, hired three buses to carry people to a hearing last month on the mayor’s proposal to revitalize 19 blocks of the Coney Island amusement district. Officials say the buses were open to those who favored or opposed the plan, but council members say it was clear that most riders were supporters.
“I don’t ever remember L.D.C.’s lobbying council members or elected officials the way they have been to promote Bloomberg projects,” said Councilman Tony Avella, a Queens Democrat who is chairman of the Council’s subcommittee on zoning and franchises and who is a candidate for mayor.
The Coney Island group also paid more than $182,000 to Yoswein New York, another of the city’s major lobbying firms, to help promote its efforts to help the mayor gain public approval for his redevelopment plan, records show. “We do public relations as well, and for this client we were hired to do marketing and public relations,” said Jamie Van Bramer, who handled the account for Yoswein. “We did no lobbying on this one at all.”
Likewise, the Glover Park Group, which received at least $30,000 from the Flushing Willets Point organization, said it focused on “press relations,” not lobbying. Harry Giannoulis, president of the Parkside Group, which lobbying records show got $125,000, said Ms. Shulman hired it to lobby, among other duties.“We didn’t want to do anything improper,” Ms. Shulman said. “We have been working very hard to try to do something that is in the best interest of the city, and we did what we thought was correct.”