The New Direction Development Corporation is located in the same Springfield Gardens building as an attorney who served as campaign treasurer for both Rep. Gregory Meeks, left, and state Sen. Malcolm Smith. The lawyer also cofounded the organization. The New Direction Local Development Corporation, a charity started through the initiatives of state Sen. Malcolm Smith (D-St. Albans) and Congressman Gregory Meeks (D-Jamaica), has come under scrutiny by an ethics watchdog group after a review of public documents revealed that large amounts of taxpayer money have gone unaccounted for.
“It raised so many red flags that you don’t normally see with nonprofits and that bears looking into,” said Ken Boehm, chairman of the National Legal and Policy Center, the organization that conducted the research. “A public office is a public trust, and even though officials are subjected to a fair amount of transparency, all too often they do not get the scrutiny that they deserve.”
Smith acknowledges founding NDLDC, but denies any further involvement, while Meeks rebuffs any and all ties to the group.“It raised so many red flags that you don’t normally see with nonprofits and that bears looking into,” said Ken Boehm, chairman of the National Legal and Policy Center, the organization that conducted the research. “A public office is a public trust, and even though officials are subjected to a fair amount of transparency, all too often they do not get the scrutiny that they deserve.”
In an interview with the Queens Chronicle on Tuesday, Meeks said he has never donated money to NDLDC and has no knowledge of
The New Direction Local Development Corporation, a charity started through the initiatives of state Sen. Malcolm Smith (D-St. Albans) and Congressman Gregory Meeks (D-Jamaica), has come under scrutiny by an ethics watchdog group after a review of public documents revealed that large amounts of taxpayer money have gone unaccounted for.
“It raised so many red flags that you don’t normally see with nonprofits and that bears looking into,” said Ken Boehm, chairman of the National Legal and Policy Center, the organization that conducted the research. “A public office is a public trust, and even though officials are subjected to a fair amount of transparency, all too often they do not get the scrutiny that they deserve.”
Smith acknowledges founding NDLDC, but denies any further involvement, while Meeks rebuffs any and all ties to the group.
In an interview with the Queens Chronicle on Tuesday, Meeks said he has never donated money to NDLDC and has no knowledge of the information contained in its tax return filings.
“It is not my charity,” he said. “I didn’t hire anyone and I didn’t get involved with the day to day operations of the group.” Meeks called reports regarding the matter, which first appeared in the New York Post on Jan. 31 a “misrepresentation” and a “hit job without the facts.”
NDLDC’s mission is to “foster economic development in southeast Queens,” through the “rehabilitation and revitalization of commercial districts, the creation of affordable housing, and an increase in home ownership in the area,” according to the website for the nonprofit, but tax documents suggest the group is doing otherwise, according to the National Legal and Policy Center.
In 2001 the charity spent $38,700 out of the $57,050 it earned on consultants. In 2007 NDLDC spent $11,793 on meals and entertainment and $9,004 in federal tax penalties. Moreover, the 2007 document only lists a handful of charitable donations including community outreach services, a family day, senior appreciation day and Toys for Tots.
In 2008, NDLDC spent $810 on professional fees and other payments to independent contractors. Although it had $55,254 in net assets for that year, it lists no charitable donations or expenses other than a $10 bank service charge, so it is unclear if and how the rest of the money was spent. Calls to several of the group’s board members were not returned.
Boehm, a former prosecutor, along with a team of trained investigators and retired attorneys, spent more than 100 hours reviewing IRS tax returns, state budget records and other documents. They concluded that NDLDC does more to benefit Meeks and Smith than to create development.
The Springfield Gardens charity was incorporated in Feb. 2000 under the names of individuals closely associated to the two Queens Democrats rather than the men themselves — Michele Smith, the wife of Malcolm Smith, Cathy Greene, the wife of Darryl Greene, Smith’s former business partner, and Michael Flowers, the son of Joan Flowers, an attorney who worked as a campaign treasurer for both Smith and Meeks.
“I think he was being careful, knowing what the code of ethics was,” Boehm said of Smith. “You can’t do political favors for organizations and have those organizations donate to groups that you direct, because then it appears that government services are for sale.”
In an email statement, Tai White, a spokeswoman for Smith, said the legislator appropriated funds for charity, but denied that he or his wife had any involvement in its day to day operations since he helped found it.
“As for their accounting of charitable donations separate from state funds, that is the sole perview of the organization and does not involve the senator,” White wrote.
In 2005, the NDLDC created New Yorkers Organized to Assist Hurricane Families, an effort to provide aid to the victims of Hurricane Katrina and received $31,210 in donations — $11, 210 from a community gospel concert, $5,000 from Meeks’ campaign committee and $15,000 from other donors — but NDLDC only reported $1,392 for aid to Katrina victims on its tax 2006 tax return.
Meeks’ campaign committee originally donated $10,000 to NOAH-F, but according to a 2008 amended filing, half of it was returned. Meeks said that his campaign had pledged $5,000 but the additional money was “inadvertently given by mistake” and that is why it was returned.
Meeks explained that he worked with community members to help set up a transparent system to collect donations for NOAH-F in order to prevent a “commingling” of bank accounts between the group and NDLDC, but that is where he says his involvement ended. Meeks said the donations were given to 30 families who had been displaced after Hurricane Katrina and were living in New York. He said to his knowledge the victims would bring in their rent bills and utility bills and the group would write out the checks directly to the companies and landlords.
The National Legal and Policy Center plans to file a state ethics complaint against Smith later this week and will ask the IRS to review the matter as well. “We don’t have subpoena power, but we can examine something and say ‘This doesn’t look right,’” Boehm asserted.
Meanwhile, the involvement of Greene, Smith’s old business partner, could cause a problem for the state’s selection of the Aqueduct Entertainment Group to redevelop Aqueduct Race Track. In 1999, Greene, an investor in AEG, was convicted of stealing $500,000 from city agencies and private firms that paid him for affirmative-action hiring services. Assembly Speaker Sheldon Silver (D-Manhattan) insists that any investor in the winning bidder cannot have a conviction involving “larceny of any sort.”
