Volume 21, Number 50 | The Newspaper of Lower Manhattan | April 24 - 30, 2009
Tensions high as state investigates B.P.C. Authority
By Julie Shapiro
Tension roiled the usually sedate Battery Park City Authority when the board’s Audit Committee met last week.
The meeting came three days after the New York Post reported that the state inspector general was investigating the authority for misusing funds and possible misuse of private B.P.C. apartments.
The Audit Committee spent the first 20 minutes of last Thursday’s meeting talking about the investigation only tangentially, until Vice Chairperson Charles Urstadt spoke up.
“What we’re doing is ignoring the 800-pound gorilla in the room,” Urstadt said.
Urstadt pressed Chairperson James Gill for more information on the investigation — which several board members insisted be called a “review” instead — but Gill had little to offer.
“The inspector general doesn’t keep us posted on everything [he’s] looking into,” Gill said. “It doesn’t work that way.”
Jim Cavanaugh, president and C.E.O. of the authority, said he received a brief letter from the inspector general requesting several categories of records: out-of-town travel, apartments rented by the authority, charitable and political contributions, use of cars, the authority’s ethics manuals and a list of current and former employees. Cavanaugh turned the letter over to Alexandra Altman, the authority’s counsel, and at Altman’s recommendation, the authority then hired Andrew Lankler, a white-collar crime attorney and former authority staffer, to represent them.
Urstadt wanted more detail.
“We can’t push them under the rug,” he said of the inspector general’s concerns. “We have to face up to them…. I would like to see a copy of that letter — right now.”
Altman hesitated and said she would not want to anger the inspector general by distributing the letter — especially because she said the inspector general was upset that word of the investigation wound up in the press.
Gill agreed, saying that it was standard procedure to check with the inspector general before copying any documents he sent, and it would be “insane” not to do so.
But Urstadt said the inspector general cannot control the authority.
“Who runs this corporation?” Urstadt asked.
Gill, growing annoyed, replied, “I don’t know what you’re talking about.”
Robert Mueller, another board member, backed Urstadt’s request for the letter.
“To not have this letter, and yet we’ve hired counsel,” Mueller said, “I now have counsel representing me and I don’t even know why.”
Urstadt said the authority staff’s refusal to release the letter amounted to a lack of transparency.
“You know, this is like Bette Davis, remember her?” Urstadt said, referring to the 1940 movie with the incriminating missive, “The Letter.” “The letter, give me the letter!”
Urstadt motioned that the authority release the letter to the Audit Committee. He and Mueller voted in favor of the motion, while committee chairperson Frank Branchini voted against it.
“I think you’ve done a great disservice,” Branchini said after the vote. “It is putting the members at risk — I just don’t think it’s the way to go.”
At Branchini’s request — and over Urstadt’s objection — the committee took a brief recess so Altman could call the inspector general and ask for permission to comply with Urstadt’s motion.
Before the committee could disperse, Urstadt added a postscript to his request: that if the inspector general said no to releasing the letter, Urstadt wanted to see that in writing.
“I don’t want to hear hearsay, and it would be hearsay [to report a telephone conversation back to the board],” Urstadt said.
As several people spoke over each other, Gill leaned back in his chair and muttered, “Jesus Christ!”
As it turned out, it was not necessary to resolve that question, because Altman returned after the recess with the news that the inspector general approved the circulation of the letter among board members, with the caveat that it not be made public. The authority would not release the letter, which was sent Feb. 9.
Urstadt was the first chairperson of the authority and served under former Gov. Nelson Rockefeller 40 years ago. Like Gill, Urstadt is now an appointee of former Gov. George Pataki and up until the last few months, the two board members have appeared to get along well.
The allegations that spurred the inspector general’s investigation came from Debra Bogosian, the authority’s former controller who was fired last fall, Gill said. Bogosian sent letters with complaints against the authority to board members, then forwarded those complaints to the inspector general, Gill said. The complaints reportedly include that the authority hired unqualified workers with Republican connections and misused cars and an apartment for personal purposes.
“We all know what gave rise to this whole thing,” Gill said. “There’s no mystery here.”
Bogosian did not return a call for comment last week.
Cavanaugh said after the meeting that the authority is not investigating Bogosian’s allegations internally. He said the authority reached an agreement with Bogosian on severance and he considered that matter resolved.
Thursday’s Audit Committee meeting was a colorful introduction to the board for Bogosian’s replacement, Joy Granado. She was mostly quiet during the meeting, but her new boss, Robert Serpico, said she was already hard at work.
“We threw her in the soup right away,” he said.
The substance of the committee meeting, before it veered off course into discussion of the investigation, was an internal audit of travel and expense spending that Mueller, a board member, said he had been calling for for years. Cavanaugh said that review predates the inspector general’s inquiry and is unrelated.
Wilson Kimball, a senior vice president at the authority, presented 13 proposed changes to the authority’s policies, including that the authority will no longer reimburse employees for parking and moving violations, as it had in the past. Cavanaugh said the authority reimbursed employees driving authority cars for running red lights five or six times in the past several years.
Mueller questioned why an authority confined to one neighborhood owns private cars to begin with and said he was frustrated that the authority has not disclosed how many cars it owns and how they are used. Kimball promised to have answers in May.
Other proposed changes to the authority’s policy include stricter regulations on reimbursement for food and travel expenses, limits on working from home and more review for cost increases on contracts.